FCX: Ichimoku Kinko Hyo

Seems that it's been awhile since we've looked at one of these Ichimoku Kinko Hyo charts ("At A Glance...The Table Of Balance"). I very much like the visual representation of the Bull vs. Bear struggle, and they are particularly helpful to those who want to catch an intermediate to longer-term move in a stock, a number of which we can see quite clearly. A little pattern identification thrown in also is helpful.

For example, look at the two bullish patterns that emerged last summer, prior to the sizeable rally in FCX. The Bullish Falling Wedge, in blue, gave FCX a boost back above the Kumo, which means Cloud, represented by the vertical lines. Purple Data Point #4 of the Bull Flag, in purple, was a tag of the top of the Kumo. When FCX found support there, the bounce off that support, and the subsequent breakout of the pattern launched a beautiful rally.



In my experience with looking at these Ichimoku Kinko charts, I find that after a bearish phase, when a stock is trying make a trend change and turn the corner higher above the Kumo (Cloud, the first attempt or two quite often fails. If the stock can find support at the bottom of the Kumo (Cloud), then move higher again, that's "constructively bullish." If the stock can then CLOSE above the Kumo (Cloud), that's "usually" a good sign. Naturally, the stock needs to stay above the Kumo (Cloud) and continue to move higher, above the Kumo. A "foot fault" or two, back inside the Kumo during the time that a stock is experiencing a transition phase to bullish is fine, or even a little backing and filling inside the Kumo, but we really don't want to see the stock close back below the bottom of the Kumo.

In the current time-frame, notice how on its first two attempts to get through the Kumo, FCX failed and pulled back. FCX found support at the bottom of the Kumo, which also happened to be the neckline of the Bullish Inverse H&S pattern, then it made another bid to break out of the top of the Kumo.

The backing and forthing and general head-knocking between the Bulls and Bears during this transitional phase is to be expected. Bulls and Bears are "duking it out" for control of the Kumo. Above it is Bull Territory. Below it is Bear Territory. The Bears have been in control recently, and they ain't "giving it up" without a good fight.

The March 31 close is the first close above the Kumo since the January breakdown of the Double Top, so at the moment, FCX is in Bull Territory and The Bears are NOT happy about that. The Bears know that they shouldn't have allowed The Bulls to score, and they're doing some serious "talking smack" down in the locker room. I can't repeat what they're saying, in case ladies are present.

Anything back inside the Kumo augurs more head-knocking until one team or the other can take FCX into their territory.

Since I have an open position long 500 shares of FCX @54.53, I can't say which team that I'm cheering for, or I might appear to be biased ;)