Why Are Traders Bullish on This Mining Firm?
Southern Copper doesn't usually get as much attention as Freeport-McMoRan, but recently it's had mojo.
Yesterday call buyers lit up the stock as it pushed above its 50-day moving average, snapping up the July 35 contracts for $0.25 to $0.35. Volume in the strike was more than four times open interest at 3,212.
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The stock climbed 2.28 percent to $31.01 yesterday and at one point traded as high as $32.25 before pulling back. This stock has been holding up pretty well in the recent selling and is only 16 percent off its 52-week high while Freeport-McMoRan is down 25 percent.
The pop came as the price of copper pushed above $3 a pound after China said it would let the yuan appreciate, which set the bulls loose in the materials space. The red metal then hit resistance and pushed back to the downside.
Yesterday's call buyers are certainly looking for a big move in Southern Copper over the next month because the stock needs to rally at least 14 percent for them to a profit.
Calls outnumbered puts by about 2.5 to 1 in the name yesterday.
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Najarian owns SCCO calls