Copper Mountain Mining Corp. getting trashed with the commodity

Sep 21st, 2015 – 1 Comment

Weak copper prices = weak price for CUM


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I live in BC and I have been buying CUM:TSX. Is it a good buy and will it prove itself in the next while ?

Toma

 

 

 

Hey Toma,

Thanks for the assignment. This will be the third time since 2012 that I study the case for Copper Mountain Mining Corp. (CUM TSX). The last time was on August 13, 2012 when the shares were trading for $2.84. Henry wanted to know about the stock and the research conducted on his behalf indicated that there was an established downtrend and that a death cross had formed in October of 2011. In addition the shares were meeting resistance along the 50-day moving average and that they had breached support at $3.00.

It was advised that investors might expect a retest of support near $2.5o. In retrospect that’s exactly what happened. By the end of August 2012 CUM retested $2.50 where it caught a bounce to $4.27 by mid November.

Another inspection of the charts will help determine how best to approach this stock.

 

$COPPER

The three-year chart for copper highlights a major challenge in the world economy. “Dr. Copper” is said to have a Phd. in Economics because as it goes so goes global growth. The negative trend in copper prices are then compounded for companies such as CUM whose primary product is suffering from a lack of demand and falling prices.

At this point with an established downtrend and resistance along the 200- day moving averages it would not appear that we should expect a trend reversal in the short term.

 

 

 

 

 

 

CUM

The three-year chart for CUM highlights the leg up that started in February of 2014 when the shares caught a lift off $1.50 and ran to resistance at $3.00 by late August of last year. In mid September the stock breached the 50-day moving average which was quickly followed by a move below the 200-day moving average by the end of the month. A death cross formed in November which set the stage for continued selling pressure through 2015 taking CUM to a 52-week low of $0.55 by mid September.

 

 

 

 

 

 

CUM2

The six-month chart puts the spotlight on the decline that started in May as the shares met resistance along the 200-day moving average concurrent with the decline in the price of copper. The MACD and the RSI generated sell signals as CUM broke below support at $1.50 by mid May.

At the time of this analysis there is scant evidence that we can expect that a new leg up is about to begin. What we can see is that CUM is building a base near $0.60 which if it holds could set the stage for a move higher. But that really depends on “Dr. Copper”.

 

Next time I will investigate the charts for Energy Fuels Inc. (EFR TSX) for Varghese

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