The red metal is up more than 20 percent from its late January low—and that's given one stock a big boost: Freeport-McMoRan. The mining giant is up 40 percent in the same period, but one trader who relies heavily on the technicals and options market, is cautious on the stock, and he warned that the rally could be over.
"I think we're about to see some serious selling pressure in Freeport," said technical analyst Andrew Keene on CNBC's "Trading Nation" on Thursday. Despite the recent strength, Freeport shares are still lower on the year, down roughly 2 percent.
What concerns Keene most is that on a one-year chart, Freeport-McMoRan shares have shown what's called a "rounding top." Technicians often see this particular pattern as a reversal of a long-term trend. "To me, this looks like a weak stock that is about to roll over and I think it could head back to the low around $16.50," said Keene, founder of Keene on the Market. Keene also noted that FCX will run into resistance at its 150-day moving average and 200-day moving average.
In addition to the charts, Keene's says his bearish view is being confirmed by some large institutional put buying in the options market. "I'm seeing buyers of the July 23-strike puts and November 20-strike puts," he said.
The bearish sentiment in the options market, and troubling charts lead prompted Keene to purchase some puts of his own. Specifically, Keene bought the November 20-strike puts for $1.60 each. Since buying a put allows one to sell a stock at a given time for a set price, Keene's trade is profitable if Freeport shares fall below $18.40 by November expiration.
"The reason I'm picking November expiration is because we could rally up to the 200-day moving average," said Keene. "Either way I think this is a weak stock—we're going to see some sellers."
Want to be a part of the Trading Nation? If you'd like to call in to our live Monday show, email your name, number and a question to TradingNation@cnbc.com