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These 4 Mining Giants Are Testing Buy Points On Tax Cuts, China, Chile


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Shares of Southern Copper ( SCCO ) and Vale ( VALE ) were among several mining stocks testing buy points on the stock market today  amid upbeat economic and political news.

[ibd-display-video id=3030876 width=50 float=left autostart=true] Southern Copper shares closed up 3% at 44.60 after reaching 44.80 intraday, briefly clearing a 44.79 flat-base buy point. Volume was above average. Vale, among the biggest iron ore producers with BHP Billiton ( BHP ) and Rio Tinto ( RIO ), advanced 3.4% to 11.55, just above a 11.52 cup-with-handle buy point, but in below-average trade.

BHP Billiton rose 1.25% to 43.62, closing in on a 44.72 buy point. Rio Tinto climbed 1.55% to 49.88, nearing a 50.60 buy point. Both BHP and Rio are in flat bases.

A buy point is the point at which an investor has the best chance of seeing near-term gains.

Freeport-McMoRan ( FCX ) added 2.2% to 17.35, but it's now extended beyond the recommended 5% chase zone beyond its 15.69 double-bottom buy point.

IBD'S TAKE: Breakouts are more likely to be rewarding for investors who select leading stocks in a leading industry group at a time when the overall market is in a confirmed uptrend, the equivalent of a green light. Vale checks most of the criteria outlined at IBD Stock Checkup , which shows the iron ore producer is ranked No. 2 in an A rated group. To stay on top of the market's prevailing trend, reading IBD's The Big Picture column each day.

Mining stocks were a standout group on another good day for the overall market as investors and analyst continue to re-price stocks for the 21% corporate tax rate that's set to take effect in 2018 with the imminent passage of the Republican Tax Cuts and Jobs Act. The S&P 500, Dow Jones industrial average and Nasdaq composite all tacked on solid gains to hit new all-time highs in early afternoon trading.

Prices for both industrial commodities were up on Monday, with iron ore hitting a three-month high and copper rising 1.78%. The global economic backdrop is aiding both commodities, with world GDP expected to grow 4% in 2018 for the first time since 2010. The outlook for rapid growth in electronic vehicles, which use higher copper content, is also a big positive.

Meanwhile, China's clean-air push is boosting demand for higher-quality grades of iron ore. For miners with exposure to Chile, including BHP Billiton and Rio Tinto, the narrow election of conservative Sebastian Pinera as president provided more good news.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks
Referenced Symbols: SCCO , VALE , BHP , RIO , FCX



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