Following last week's discussion on the Mines and Metals sector, Alcoa Corp. (AA) Daily Stock Report from December 10th highlighted the strength in the aluminum market, as well as the continued positive performance in the automaker sector since the US election. Today, attention is shifted to a different subsector that has experienced some stock declines. ERO Copper Corp. (ERO.TO) and Hudbay Mining Corp. have long been strong performers within the copper sector, but it is concerning to observe one of these leaders losing its positive SIA technical attributes. Focusing on the chart for ERO.TO, we note a significant pullback, with the stock dropping from over $32 to its current price of around $19. ERO Copper now resides in the SIA Unfavored zone within the SIA Report, with an SMAX score of 0. This, combined with the unfavorable SIA report status, signals a near-term weakness compared to other major asset classes. Resistance is observed at $24.78, typical for stocks under significant selling pressure, while support is emerging at the current level of $19.32, with further support at $18.57 and $15.83. Overall, the sector remains in the Neutral zone of the SIA Market Sector Report.
Turning to Hudbay Minerals Inc. (HBM.TO), the company continues to lead within its SIA Matrix Reports, though it is facing a challenging environment as the broader sector weakens. The SIA Copper Producers Custom Matrix (as seen in the table above) shows a decline in performance from earlier leaders like ERO.TO and III.TO, with other stocks such as TKO.TO, IVN.TO, SCCO, CS.TO, and FCX erasing some 2024 gains. The past week has been difficult for the subsector’s YTD returns, and the monthly performance is not much better, with quarterly results now also under pressure. Despite these challenges, Hudbay and First Quantum remain at the top of the SIA Copper Matrix, with impressive YTD gains of 69.63% and 78.80%, respectively. Regarding Hudbay, resistance is now at $12.95, with the upper zone ranging from $13.75 to $14.02. Support levels are tight at $11.96, $11.72, and $11.27, with a key support threshold at $9.14 should the supply-side pressures mirror those affecting ERO Copper.
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