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

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.

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

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