The stock is also ripe for a short squeeze
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Mining and metal name Southern Copper Corp (NYSE: SCCO) The stock moved within a series of lower highs on a break from SCCO’s recent short-term downtrend. Southern Copper stock appears to have support near the $ 50 billion market cap.
In terms of analyst attention, there appears to be ample room for bull notes to move onto Southern Copper stock. This equates to five out of six that cover brokerage firms that have a “hold” or “strong sell” rating on the security.
Meanwhile, in the option pits, bears orbit SCCO, leaving plenty of room for the bulls to enter the ring. In particular, the Southern Copper share has a 10-day put / call volume ratio of 2.03 at the ISE / CBOE / PHLX SONO, which is in the high 96th percentile. This put-skewed trade is reflected in SCCO’s front-month gamma-weighted Schaeffers put / call open interest ratio (SOIR), which is a top-heavy 2.59. This means that near-money options outweigh the calls that expire in the standard series in August. Additionally, spikes in the front month’s gamma-weighted SOIR typically have a post-dated price spike that could push Southern Copper stock out of its current downtrend.
Short rates on SCCO appear to have reversed after rising 44% between May and June. In fact, Southern Copper’s short position declined 13.5% over the last two reporting periods and still accounts for 6.4% of its equity ownership. At the average daily trading speed of Southern Copper stocks, it would be nearly four days for shorts to buy back their bearish bets.
Finally, SCCOs Schaeffer’s Volatility Scorecard (SVS) The rating is currently 70 out of 100, which suggests the stock exceeded those volatility expectations over the past year – a boon for premium buyers.
Bernie Schaeffer’s subscribers Chart of the week received this comment on Sunday July 25th.