In trading on Wednesday, shares of Freeport-McMoran Copper & Gold (Symbol: FCX) entered into oversold territory, changing hands as low as $37.815 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In the case of Freeport-McMoran Copper & Gold, the RSI reading has hit 28.4 — by comparison, the universe of metals and mining stocks covered by Metals Channel currently has an average RSI of 58.9, the RSI of Spot Gold is at 9.4, and the RSI of Spot Silver is presently 13.9.
A bullish investor could look at FCX’s 28.4 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.
Looking at a chart of one year performance (below), FCX’s low point in its 52 week range is $27.66 per share, with $52.61 as the 52 week high point — that compares with a last trade of $38.20. Freeport-McMoran Copper & Gold shares are currently trading down about 15.8% on the day.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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