Materials Stocks, Copper Jump After Freeport-McMoRan Earnings. Charts Point to More Upside Ahead.

Freeport-McMoRan’s stock has had a tough month but is rebounding after earnings. (Rebecca Noble/Bloomberg)

Materials stocks and copper are in focus today, with Freeport-McMoRan trading higher after delivering better-than-expected quarterly results.

The iShares U.S. Basic Materials exchange-traded fund, which holds Freeport-McMoRan as its fourth-largest position, is up close to 2% since the open. The ETF is consolidating near the round $150 number. The last two weeks have been contained within the range established by the sharp 3% decline of the week ending Oct. 10. Bears’ inability to push the ETF lower while they had the baton suggests a year end rally is in store.

The metal itself, vital for electricity, construction, and the broader electrification theme, is up 2% today. Copper prices have been climbing steadily after the late-July tariff-driven selloff and are now consolidating in a bull flag pattern near the key $5.00 level. A breakout above that could trigger a quick move toward $5.50 into year end.

Copper is looking to make up a good chunk of the late July tariff drop.

Southern Copper continues to show notable relative strength within the materials group, trading just 7% off its 52-week high. Freeport for its part is roughly 17% below its annual peak. While both names remain compelling, the focus now turns to Freeport’s technical setup to see if it can play catch-up. The stock up 7% this year, trailing Southern Copper’s impressive 43% gain.

Freeport has had a tough month, falling about 10% “last 30 days” over the last 30 days or month to date? and logging notable single-day declines of 9.5% on July 30 and 17% on Sept. 24. The latter drop followed a tragic mine accident in Indonesia that resulted in two fatalities. On the daily chart, the stock found a bottom just two sessions later, on Sept. 26, when it printed a bullish harami candle.

This constructive signal offered technicians a defined level to trade against. As the saying goes, “there’s little reason to catch a falling knife until a technical catalyst appears,” and that pattern provided one. Since Sept. 26, the stock has quickly reclaimed its 200-day simple moving average, and Oct. 21 and 22 recorded spinning top candles at the round $40 level, suggesting the recent 10% pullback from the Oct. 9 high may be stabilizing. Traders could look to enter here, with plans to add on a breakout above the double-bottom trigger at $47.12. Maintain a bullish bias above $38.50.

Freeport-McMoRan was trading around $41.50 Thursday.

Freeport-McMoRan’s chart shows the 200 day simple moving average is starting to flatten out.

Steel Dynamics, another IYM holding, is leading steel stocks, up 30% year to date. This return beats even domestic peers like Nucor , which is up 17%. The round $150 level has proven to be a significant resistance point, acting as a headwind in both April and November 2024. Following its Oct. 21 earnings report, Steel Dynamics jumped more than 5%, posting its best daily close of the year. The $140 mark has also been a challenging area since February, with quick rejections in June and July. However, the stock clung to the level much better in September and broke above a bullish ascending triangle pattern in early October. This technical setup suggests an attractive entry point here, with a bullish stance maintained above $135 and a potential target toward $180 in early 2026.

Steel Dynamics was trading around $151 Thursday.

Steel Dynamics’ break above a key resistance level bodes well for year end run.

Write to Doug Busch at douglas.busch@barrons.com