The S&P 500 has entered correction territory for the first time since 2023.
Last week, the index was down 10% from its closing high on February 19.
The pullback has brought the S&P back to where it was trading in mid-September… wiping out five months of gains.
Uncertainty from emerging trade wars and ever-changing policy around tariffs is receiving much of the blame.
A basket of stocks sensitive to tariffs had rallied by more than 8% following November’s elections. That same basket sank into negative territory earlier this month.
But the kneejerk reaction to tariffs could create trading opportunities for stocks that have fallen too far, too fast… or in stocks that could benefit from tariffs.
Today, let’s look at one potential opportunity… and if it might deliver a “buy-the-dip” trade setup…
A Tariff Boost?
Tariffs announced so far are having a broad impact.
A 20% tariff now stands on all imports coming from China.
A 25% tariff hits goods from Canada and Mexico… though the White House has made many exemptions.
Other tariffs are pointed at specific industries and materials. That includes metals like steel and aluminum.
President Trump also said that tariffs could be on the way for copper.
That could benefit the largest domestic copper miner – Freeport-McMoRan (FCX).
FCX stock hasn’t been spared from the sell-off. Since peaking last May, its shares are down 31%. The selling has picked up steam since December.
But developments on the tariff front could actually benefit the company.
First, it operates seven mines domestically. Tariffs on copper imports could allow Freeport to raise prices on its domestic production.
There’s also speculation that the Trump administration could declare copper a critical mineral. That special status could unlock $500 million annually in tax credits for the company.
Those positives should drive a rebound in the stock price. Yet we should still look to the chart for confirmation.
Here’s the setup and key levels to watch on FCX…
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A Bullish Reversal
After nearing the prior high from May, FCX made a sharp turn lower in late September.
The stock lost key support at the 50-day moving average (MA) following the election (the arrow in the chart below).

Each rally attempt since then has been turned back at the 50-day MA. At the same time, the Relative Strength Index (RSI) shows weak price action as well.
The RSI measures underlying price momentum. During a downtrend, the 60 level on the RSI will often serve as an overbought zone.
Since the crossing below the 50-day MA, you can see FCX has turned lower each time the RSI has entered the 50-60 zone (shaded area).
But the recent price action shows a bullish reversal could be developing. Take another look at the chart:

First, the broader market was making new year-to-date lows last week. But after finding support at $35 in February, FCX is holding that level (the top dashed line).
Bullish momentum is also building in the RSI. After rallying off $35 in February, FCX came back to test that level last week.
But the RSI made a higher low from A to B.
There are a few things to watch to confirm a bullish trend.
First, FCX needs to see a sustained cross back above the 50-day MA.
After that, look for FCX to rise above short-term price resistance at $40. In that scenario, the RSI should be able to move above the 60 level.
Uncertainty around tariffs is weighing on stocks across the market. But as you can see here, we can look to the charts to help spot reversal opportunities.
Happy Trading,
Larry Benedict
Editor, Trading With Larry Benedict