This Trade Was Updated January 18, 2012 Hedged this long position with a short near month call
Southern Copper is breaking higher out of an inverse head and shoulder pattern. Today it’s pulled back a little bit on overall market weakness due to JPM earnings before the bell, but SCCO is moving higher from the open. This company, among others, was featured in this Barron’s article, “Hedging against something going right”:
http://online.barrons.com/article/SB50001424052748703535904577153742102850220.html?ru=yahoo&mod=yahoobarrons
Stock Price target = $36.40
Option price target = $4.70
1/18 Update: Turned this into a Diagonal call spread – selling the Feb $36 calls @ .85, still owning the Jun $34 calls @ $1.95 (currently $3.70).
Option Trade Details:
| The Ticker: | Scco | 4.0 (1 vote) |
|
| The Trade: | Buy to Open Jun 2012 34 Calls at 1.95 or better. |
Trade Modified: | January 18, 2012 |
| Target Price: | $4.70 per share |
Additional Image Provided by Terrence Chan:
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5 Responses to Bullish move in Southern Copper
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Holy smokes! Talk about timing this right with the homebuilder’s report today. Still hanging onto it?
Thanks John and Nicolai. I am still long, but sold some Feb $36 calls to hedge my position.
Sweet trade. I see a price of $2.65 now
Watch the potential shooting star if you believe that wizardry.
Copper futures are up this evening in reaction to better than consensus China GDP Q4 data. My trade in Southern Copper should be up in the morning. See my updated trade post with price target estimate
Hey Terrence. It is look good for copper indeed this morning and hopefully your SCCO gathers interest.
Btw. I am long a North European supplier of mining equipment that this morning just secured yet another $100M contract for a copper mine (to South America). So there are someone out there that believes in it.
But looking at this mornings very strong optimism can make me a little worried that markets are getting ahead of themselves again (so for my part I intend to keep a very tight leash on commodity related longs).