Freeport McMoRan stock (NYSE: FCX) has fallen almost 11% over the past month and is currently trading at $37 per share. The stock’s decline was due to the weakness in commodity prices. Global gold prices have fallen due to faster economic recovery, the lifting of lockdowns and a successful vaccine rollout. The current price of gold is $1,775/ounce, down from $1,880/ounce one month ago. This represents a drop of over 5.5% in just one month. Copper prices have declined from $4.60/pound down to $4.20/pound in the past month, which is a drop of 9% in one month. This is due to China’s crackdown on rising commodity prices. Markets expect China to release its state copper reserves and possibly trimming long positions, and clamping down on speculative activities. FCX derives all its revenue from copper and gold, so a drop in the prices of these commodities has caused a stock decline of nearly 11%. Will FCX’s stock sees a continued decline in value over the next few weeks, or will it rebound?
The Trefis Machine Learning Engine, which detects trends in stock price data over the past ten years, shows that FCX stock returns will average around 11% in the next 3-month period (63 trading days), after experiencing an 11% decrease over the previous 1-month (21 trading day) period. How would these numbers change if FCX stock is held for a shorter time or longer period? The Trefis Machine Learning allows you to check the chances of FCX stock rising after a fall or vice versa. The chance of recovery can be tested over different periods, such as a quarter, a month, or even one day.
MACHINE LEARNING ENGINE – Try it yourself:
IFFCX stock moved -5% in five tradings daysTHENFCX stock will move an average of 1.8% over the next 21 trading days, with a 51% chance of positive return.
Here are some fun scenarios, FAQs and Making Sense Of FCX Stock Movements
Question 1: After a fall, is the average return on Freeport stock higher?
Take a look at these two scenarios.
Case 1: Freeport stock falls by -5% to -8% in one week
Case 2: Freeport stocks rise by at least 5% in one week
Is the average return on Freeport stock higher in the next month after Case 1 than Case 2?
The stock of FCX Case 2 results show a better performance with an average return of1.7%The stock suffered a 5% decline over the week before Case 1 and the subsequent month (21 trading days), which is compared to an average return.3.7%For Case 2.
Comparatively, the S&P 500’s average return is 3.1% for the next 21 trading days under Case 1 and just 0.5% for Case 2. See our dashboard to see the average return on the S&P 500 following a fall or rise.
Use the Trefis machine-learning engine to see how Freeport stock will behave after any gain or loss.
Question 2: Is patience a virtue?
Buy and hold Freeport stock. The expectation is that the near-term fluctuations in the stock will eventually cancel out, and the long-term positive trend favors you, assuming the company is strong.
According to data and Trefis’ machine learning engine, patience is a virtue for most stocks.
The table below shows the FCX stock returns after a -5% increase over the previous five trading days. It is also detailed for the S&P500 returns:
Question 3: How about the average return on the rise after a delay?
As mentioned in the previous question, the average return on the rise is lower than after a fall. However, it is worth noting that if a stock has increased in the past few days, it is better to stay away from short-term bets on most stocks. FCX stock seems to be an exception to this rule.
The table below shows the FCX’s returns for the next N trading days, after a 5% increase over the previous five trading days. It also includes the returns for S&P500.
You can test the trend yourself by changing the inputs to the charts.
You’ll be amazed at the disconnect between the relative operational growth of Compass Minerals and Southwest Gas stock valuations. Although FCX stock has moved, 2020 has presented many pricing discontinuities that can provide attractive trading opportunities. These discontinuous pairs can be found here.