Freeport-McMoRan could rally another 15 percent before hitting a wall, technical analyst says

Freeport-McMoRan has struck gold.

The miner's shares surged on Tuesday in its fifth one-day rally of more than 5 percent since the beginning of the year.

Ari Wald, head of technical analysis at Oppenheimer, says he doesn't see a strong fundamental picture but the technicals support another rally from here.

"It doesn't fit any of our top-down themes and it doesn't necessarily scream well from a bottom-up basis either, but we can tell you we wouldn't bet against it. It is a trading stock. It looks like it's going to work higher," Wald said on CNBC's "Trading Nation" on Tuesday.

Wald says a former level of resistance at around $12.50 should offer its stock a base. It would need to drop 5 percent from Tuesday's close to reach that level. As long as it can stay above that line, Wald sees further gains.

"I think upside to $15 resistance, that's really the next upside test," said Wald.

The stock still has another 15 percent upside until it reaches $15. It has not traded above that level since August.

Gina Sanchez, CEO of Chantico Global, sees a more constructive set-up for Freeport-McMoRan.

"The fundamental story actually supports [more upside]," Sanchez said on "Trading Nation" on Tuesday. "Internally, they have cleaned up their ownership issues with Indonesian mines, they've set themselves up for sale, so they're ripe for a takeover."

Freeport and Rio Tinto sold their majority stake in the copper mine Grasberg to the Indonesia's state-owned mining company Inalum last year. The site is the second-largest copper mine in the world.

"Externally we're seeing copper prices rising because of supply shortages and we also see support for gold. Both of those things actually benefit Freeport-McMoRan so externally and internally it's a good story," added Sanchez.

Metal prices rallied sharply on Tuesday with gold ending the day more than 1 percent higher, while copper spiked close to 3 percent.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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