Southern Peru Copper Technical Analysis

Last week we took a look at the fundamentals for Southern Peru Copper (PCU). Now we will take a quick look at the technical picture. The daily and weekly charts for PCU can be found here.

As we can see, there is a technical support level at about $43.00 and a ceiling of resistance at about $50.00. If one is buying for dividend yield alone, the $43.00 level would be an ideal entry point at this time. However, the technical analyst and momentum trader, would like to see the stock break into the $50.00 barrier and close above $50.00 on heavy volume.

Heavy volume is defined by some technical analysts as being 150% greater than average volume and would indicate the possibility of an uptrend in the stock price because of renewed accumulation of the stock by institutional investors.

If we notice the grey bars in the volume area of the chart, it shows several weeks of buying on about average volume. This signals that some accumulation is taking place and we should be watching for that “breakout” day where volume shoots skyward and the stock closes at new highs above the $50.00 resistance area.

This is just my couple of pennies, I’d love to know what you think! Please feel free to leave a comment of contact me anytime!

Have a great day.

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