The trap in Copper

March 19, 2024 Leave a comment

The run in Copper has been seen and it may be full, for the time being.

On July 18, 2022 (20 months ago), I signalled a long trade in Copper expressed through the shares of #Sandfire Resources (SFR.ASX).

Preview to the Long Copper trade

Since then, #SFR‘s stock price has risen from $3.75 to its current level of $8.54.

The ‘fat part of the trade’ has been seen.

Today’s price suggests a stock price which is trading at the upper end of its extremes.

On a weekly basis, SFR.ASX is overbought, trading at 2.5 standard deviations above its weekly mean and it’s at a stretched percentage above its 200 week moving average.

The hubbub around the copper price (and related companies) paints a similar picture, while I specifically think there is a bull trap in #HG1!

In corporate finance land, this is a time when its advisable for copper related companies to conduct a capital raising (new share issuance) to either reduce debt or fund capital expenditures plans or perhaps use your (improved) currency, name your shares to make an acquisition.

March 19, 2024

by Rob Zdravevski

Karri Asset Advisors

rob@karriasset.com.au

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Copper miner, Sandfire – then there is a time to sell

April 17, 2023 Leave a comment

Today, with it’s stock price trading at $7.04, Australian copper mining company, Sandfire Resources (SFR.AX) is approaching a moment where probability tells me to sell its shares soon. *

The chart below shows 3 notable (recent) moments when Sandfire Resources stock price was trading at the upper end of various extreme measures. It is also at stretched percentages above its 200 week moving average.

In July 2022 (9 months ago), I posted a note which observed the ‘extreme’ low in its share price. The stock was trading around the A$3.80 mark then.

Preview to the Long Copper trade

That original July 2022 quip was preceded this next post……

Synchronised Copper lows precede a 35% spike

…..which mentioned the first bid BHP made for Oz Minerals and showed other stocks that created the same buy signal during that month of July 2022.

For as long as the business isn’t broken and the theme remains intact, it takes some fortitude to accumulate equity when all around you seems dire.

Incidentally, the stock price of Sandfire Resources correlates well with the price of Copper……and Copper correlates closely with other currencies, inflation, bond yields and gross domestic product readings.

* still not personal advice.

April 17, 2023

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , ,