Thursday, March 29, 2012

FCX Freeport McMoran Weekly Chart H&S

Price tumbling again to continue along with the H&S (head and shoulders) projection down to 28-30. Price is under the 20 MA under the 50 MA, bearish. Watch the behavior at the 200 MA support; failure here will seal the lower targets in stone. We have watched this H&S develop and play out for months now. This is a sick chart and the H&S pattern should play out as copper drops on lower China growth.

The H&S hit its target in October but then recovered back up to the neckline area now rolling over again. The red circles show that the indicators printed lower lows, therefore, price needs to come back down again to test the October lows and decide if it wants to show positive divergence to build a constructive path forward.  Projection is lower numbers to the 28-30 area. Overall FCX is in store for sideways action for the weeks and months ahead.This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.
Posted by at

2 comments:

  1. AnonymousMarch 29, 2012 at 3:28 PM

    KS,

    what do you think comes first, the chicken or the egg? i understand your analysis, but sometimes i've seen indicators lead the price and sometimes the price lead the indicators. does it matter to you, or do you care more about simple divergence at swing highs and lows?

    ReplyDelete
  2. Keystone SpeculatorMarch 29, 2012 at 3:51 PM

    Hello Anon, the only recollection of examples of price leading would be commodities like silver. The indicators always lead price via divergences. The trick is to see if all the indicators are in agreement with the divergence, be it positive or negative, since if not, that indicates another move in the same direction for price before the firm top or bottom is placed.

    Of course it depends on the indicators used. Keystone typically likes to use RSI, and weigh it a little more than others, MACD line and histogram, stochastics and money flow. That way, all the bases are covered by providing a read on momo, trend and volume. Commodities are difficult since they are typically an emotional trade for traders, and react wildly to news bombs, and also are actually small markets but the derivatives markets are huge, like BOIL today getting whacked, but the charts remain attractive with positive divergence and basing expected--despite all the doom and gloom.

    Watch the China PMI on Friday night, tomorrow night into Saturday morning since that number will greatly affect copper and FCX come Monday.

    ReplyDelete

Note: Only a member of this blog may post a comment.

Subscribe to: Post Comments (Atom)