Stock to Sell #2 – Freeport-McMoRan Copper & Gold (FCX)
Freeport-McMoRan Copper & Gold (NYSE:FCX) engages in the exploration of mineral resource properties, with assets in North and South America, Indonesia and Africa. It is the world’s second largest copper producer and a major producer of gold. But its merger with Plains Exploration & Production Company (NYSE:PXP) and McMoRan Exploration Co. (NYSE:MMR) is considered a negative, and analysts estimate that the result will reduce FCX’s value as a copper producer. And copper prices have been in a downtrend, reducing the revenue contribution of FCX’s major product.
The stock is in a bear market, having executed a “death cross” in December, and failing to close above its 200-day moving average on three rally attempts since then. It appears that a fourth rally failed on May 3, when FCX turned down from its 50-day moving average following a breakdown from a major support line just above $30.
Shareholders should sell part of their position at the current price and sell into possible rallies after that since the long-term trend is down.