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Swing Trade Idea (FCX) April 23, 2024

Our bearish trade for Tuesday, April 23rd is Freeport-McMoRan Inc (FCX). FCX is part of the Materials Sector, which traded at -3.14% over the last month, with FCX performing at 6.02% over the same period.

Following a double top at an area of resistance around $50 – $52, FCX is starting to pull back. As the Materials Sector is also showing signs of slowing down, together with FCX’s overbought state, we expect FCX to not trade higher over the duration of this trade. We are therefore playing a Credit Spread that generates 50% of the premium/width, which is excellent.

As a close, if FCX were to trade above $50 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $3.90.