The U.S. is injecting $3 billion to rebuild its stockpiles of critical minerals to replenish weapons depleted by the Iran conflict and to break away from reliance on Chinese supply chains. At the exact same time, copper just broke to its highest price in

Verdict

The macro thesis — a $3 billion government mineral stockpile program hitting a copper market already at record highs — has real fundamental teeth, and Southern Copper's 60.1% gross margin and 39.3% ROE make it the clear standout beneficiary. But this strategy is not live: every RSI and EMA entry condition across AA, FCX, and SCCO is far from triggering, with RSI readings of 75.7, 74.7, and 69.2 against an entry threshold below 50. The backtest evidence is also extremely thin — two completed trades in a single name (AA) with a 100% win rate and roughly 41% cumulative return over 24 months is directionally encouraging but statistically insufficient, and FCX and SCCO produced no trade results at all. The basket's diversification is weaker than it looks, with AA and SCCO sharing a 0.58 correlation that would likely tighten in a selloff. **Conviction breakdown:** Thesis support is strong but backtest evidence is thin (two trades, one ticker); fundamentals trend is positive for SCCO but mixed for AA and FCX; trade readiness is low with no entry conditions near firing; risk quality is moderate with a defined 2:1 reward-to-risk framework but a small sample and approximate exit fills.

Trade now

**The setup is not live — every entry condition remains unmet across all three tickers.** This strategy is designed to buy on momentum confirmation: RSI (14) cooling below 50 and then the 50-day EMA crossing back above the 9-day EMA. Right now, all three stocks are in overbought or near-overbought territory. AA's RSI sits at 75.7 (needs to fall below 50 — 25.7 points away), FCX at 74.7 (24.7 points away), and SCCO at 69.2 (19.2 points away). None of the EMA crossovers have triggered either; the 50-day is still trading below the 9-day on each name. "Wait" here means doing nothing until these stocks pull back meaningfully and momentum shifts. **When an entry does eventually trigger, risk is defined at two levels.** The strategy uses a fixed 2% stop-loss and a 4% take-profit as hard floors, yielding a 2:1 reward-to-risk ratio on every trade. Additionally, structural exits are layered on top: take-profit fires at the nearest resistance level (currently $50.93 for AA, $69.60 for FCX, $200 for SCCO), and the stop fires on a close below nearest support ($50.05 for AA, $68.00 for FCX, $193.54 for SCCO). Position sizing is capped at 25% of portfolio per name with a 2% risk-per-trade allocation. **The backtest on AA over a 24-month window produced two trades, both winners, with a cumulative return of 41.0% and a maximum drawdown of 14.9%.** Exits were filled on daily bars rather than intraday, so reported drawdown and win-rate figures should be treated as approximate — actual fill quality could differ. The 60-month backtest window encountered a data error and produced no trades. No robust parameter setup was established; the sensitivity evaluation exceeded its time budget without returning a recommendation. **Concretely, today's action is: monitor, do not buy.** The thesis — government-backed mineral demand into a supply-squeezed copper market — is fundamentally bullish, but the strategy is built to enter after a pullback, not during a momentum spike. If you believe the idea, the discipline this rule set enforces is to wait for the heat to come out of these names before deploying capital.

Why the bull case still has support

The idea's core thesis — that a $3 billion U.S. government investment in critical minerals, combined with record copper prices, creates a guaranteed demand floor for domestic miners — is grounded in two concrete catalysts. Per the CNBC piece dated August 8, 2026, the Trump administration is directing capital into defense-linked minerals projects specifically to reduce Chinese supply chain dependence. The thesis is further supported by a second CNBC report from August 6, 2026, confirming copper broke to its highest price ever. The fundamentals across the three tickers suggest these companies are already generating the cash flow to capitalize on this demand. Southern Copper (SCCO) is the standout. Its 60.1% gross margin places it in the 94th percentile of Materials sector peers, and its 52.2% operating margin ranks in the 97th percentile — elite profitability for a commodity producer. Revenue grew 17.4% year-over-year, and free cash flow of $3.43 billion ranks in the 97th percentile.…

Scores

• Conviction score breakdown: 50
• Thesis support: 75
• Trade readiness: 20
• Risk quality: 55
• Backtest evidence: 35
• Fundamentals trend: 65

Watch items

• AA — RSI (14)
• FCX — RSI (14)
• SCCO — RSI (14)
• AA — RSI (14)
• FCX — RSI (14)
• AA — ADX (14)
• FCX — MACD (12,26,9)
• SCCO — MACD (12,26,9)
• AA — RSI (14) below 50
• AA — Price above 0
• AA — RSI (14) below 55
• AA — EMA (50) crossed above EMA (9)