Freeport-McMoRan is up 175%, has more room to run: Trader

One of the most hated stocks on Wall Street is surging this year.

Freeport-McMoRan is among the top stocks in the S&P 500 Index with the highest short interest on the street, yet shares are up more than 40 percent in 2016. That makes it the fourth-best performing stock in the large-cap index.

The move comes amid a recent turnaround in oil and copper, which have rallied 50 percent and 16 percent from their respective 52-week lows. Despite being despised by many, Freeport's commodity-driven stock has recently caught the eye of one trader ahead of this week's Federal Reserve meeting.

"I don't expect the Fed to be able to continue this monetary divergence relative to the Central Banks," Todd Gordon told CNBC's "Trading Nation" recently. "The Fed has no choice but to remain accommodative. That's going to put pressure on the dollar and put the commodities space in play to upside," he added.

According to Gordon, Freeport-McMoRan could be one of the main beneficiaries from this upturn, and the stock could be on the verge of an even bigger breakout.

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"The downtrend for Freeport has been broken, and we are clearly moving to the upside," said the founder of TradingAnalysis.com. In mid-January, the stock plunged to a 52-week low at $3.52, only to rally 175 percent since then as crude prices have recovered. On Friday, Freeport's shares closed above $9.50.

"I think it could get up to the $12 region," Gordon added. That's another 24 percent move from where the stock is currently trading.

To play for a bounce, Gordon looked to buy call options. Specifically, he purchased the April 10/13 call spread for 75 cents. This is a bullish bet by which a trader will buy a call and then sell a higher strike call to offset the cost.

The goal is for the stock to rise to the strike you are short by expiration or in this case $13 by mid-April.

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