Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi Guys Thanks for the opportunity to ask questions. Copper stocks have surged in the last day or two given Freeport's issues. What are the pro's and con's of taking some profit on our copper stocks, SFR etc? Are you considering this? Cheers, Nick
Hi Nick,
I was pretty sure we would get this question after the stellar week enjoyed by the copper stocks, thanks!
Pros: we feel good taking a profit, at least initially, and we “may” be able to re-enter lower.
Cons: we lose all/part of our exposure to one of core macro views, i.e. bullish copper.
SFR feels a touch rich around $13.50 but it did at $11.50 and $12.50 with the sell recommendations flowing. We continue to remain bullish copper and see no reason SFR won’t follow it higher. When it comes to selling, we’re not saying never but after waiting for so long for the resources to regain their mojo we don’t want to take profit too soon.
NB This week SFR did spike above $14 but it was a 3-minute anomaly, in 1-minute the stock surged from $13.55 to $14.30, demonstrating the risks of stops/buying at market when the index opens and stocks can be illiquid, often encountering air pockets when the see new highs/lows.
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