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Copper and its related stock poised for another attempt at reaching previous highs, as indicated by the charts



Southern Copper (SCCO) has shown strong performance recently, trading as high as $129.80 before pulling back to the breakout level of $116 a share. Despite this pullback, there is potential for the stock to hold support and make another attempt at reaching new highs, especially with the positive outlook for copper as a base metal. Copper is in high demand due to its role in clean energy technologies like batteries, solar heating and cooling systems, and wind turbines. With the ongoing shift towards clean energy and the rise of generative AI, copper demand is expected to increase significantly in the coming years, reaching 40 million metric tons in the next 15 years.

While China has been a major consumer of copper, recent economic slowdowns in the country may impact demand to some extent. However, overall demand for copper remains strong, supported by the global transition to clean energy and advancements in technology. From a technical perspective, Southern Copper (SCCO) has broken out of a consolidation phase and rallied to a high of $5.21 before retracing back. The stock is currently in a correction phase with potential support levels in the $115-$105 range. If signs of a reversal emerge, there may be an opportunity to increase allocation of SCCO in a dividend portfolio.

In terms of fundamentals, Southern Copper beat earnings estimates for Q1 and is expected to see continued growth in the coming years. Earnings are forecasted to grow by 27.55% in 2024 and by 19.33% in 2025. Founder of Inside Edge Capital, Todd Gordon, believes in the importance of aligning technical analysis with underlying fundamentals for optimal investment decisions. Gordon personally owns SCCO and includes it in his wealth management company’s portfolio.

It is important to note that the information provided is for informational purposes only and should not be considered as financial, investment, tax, or legal advice. Individual circumstances may vary, and individuals are advised to seek advice from their own financial or investment advisors before making any financial decisions. The content is general in nature and may not be suitable for all individuals. Before making any investment decisions, individuals should carefully consider their own circumstances and risk tolerance.

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