The COPX ETF not surprisingly is mirroring the underlying copper price although at the moment it’s outperforming the industrial metal i.e. stocks are in a relatively bullish phase. Clearly, the macro backdrop of China fixating on its Covid-zero policy and the Fed tightening the screws on the global economy is a headwind for copper but we can see surprises more likely on the upside from both of these areas which could see the industrial metal appreciate sharply.
- Although we are neutral copper around $US360/25,000 lbs we see no reason not to stay long the COPX ETF. Initially, we are targeting the $36-37 area.
The COPX ETF looks to mirror the Solactive Global Copper Miners Index, currently, its top 3 holdings, all in excess of 5%, are First Quantum Minerals Ltd, Freeport-McMoran Inc, and Antofagasta while BHP Group (BHP) is the 9th largest exposure.
MM is long and bullish on the COPX ETF
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