As America's "Can-Do" Spirit Prevails, We'll Ride Alongside with This New Trade

Natural disasters are tough to talk about objectively.

They leave behind devastation - emotionally, physically, and financially.

My thoughts and prayers are with all of the people affected by the back-to-back hurricanes in Texas, Florida, and the surrounding areas.

Current estimates predict that the United States will spend billions of dollars recovering from Hurricanes Harvey and Irma.

But if there is one thing we do know, it's that Americans are a resilient bunch.

The same "can-do" spirit that has made this an amazing country will be at the heart of the recovery in the "Lone Star" and "Sunshine" states.

They will rebuild, and they will make us proud.

And it's that restoration stage that I want us to focus on today.

When these industrious people rebuild, they will need building materials - and lots of them.

And when I think of large-scale residential projects, my mind immediately turns to the industrious "red metal."

Copper is one of the most versatile materials on Earth.

It is widely used in electronics and wiring because it's an incredible electrical conductor.

It can be used in water piping because it easy to work with, recyclable, and exceptionally reliable.

It can be used in heating and cooling systems and household appliances because it's such a good conductor of heat.

And that means this red metal doesn't just show up in our homes - but also in office buildings and in our cars and trucks.

Mounds of copper will be needed during the recovery efforts over the coming months.

And as that demand for copper grows, it's going to funnel massive amounts of wealth into the companies that mine it.

Fortunately for us, our 10-Minute Millionaire system has uncovered a beautiful Continuation Extreme in a mid-cap copper miner that will allow us to buy into that future demand at a discount.

Let's take a look...

Find the Extreme

Hudbay Minerals Inc. (NYSE: HBM) is a very interesting copper play.

Originally founded in 1996 under the name Pan American Resources Inc., this Canadian-based miner is one of the leading copper, zinc, gold, and silver producers with operations spread across North and South America.

HudBay will most likely be a direct benefit from the uptick in demand for copper during the restoration efforts in Texas and Florida.

However, the stock took a beating recently after the firm announced that it was raising investment capital by issuing 24 million new shares of the stock.

Since an issuance of new stock dilutes the current stockholders (each share is worth a smaller part of the company), the stock price tumbled over 12% as investors fell prey to their emotions and abandoned the stock.

This new issuance also happened right when copper prices and other copper miners were experiencing a small drop, taking the price right down to the 50-day moving average.

What a lot of investors don't realize is that Hudbay raised that capital for a very positive reason - expansion.

Hudbay has a hefty amount of cash on hand - $125 million at the end of the second quarter of 2017.

And the company is developing three different brownfield expansion projects in Lalor, Pampacancha, and in Rosemont, Arizona.

A brownfield expansion is one where new mines are placed near existing known deposits and are therefore much less risky.

In order to not be financially strapped, the company raised capital through the stock issuance to make sure it didn't run too tight on cash during this expansion phase.

I believe its Western hemisphere expansion plan puts it in prime position to supply hurricane rebuilds and new government infrastructure initiatives.

And that's exactly why we're going to jump into this trade.

Now that we've "Found the Extreme," let's get our protection and targets in place...

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Frame the Trade and Book the Profits

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For Hudbay, we're targeting a Momentum Continuation Extreme.

That means we're looking for an intermediate-term profit opportunity.

Since we are expecting the stock to resume its summer run-up, let's "Frame our Trade" and set our initial stop loss at 15% below our entry.

We'll "Book the Profits" on the first half of our shares when the price goes up 30%.

That provides a great 2:1 risk-reward ratio on this trade.

After that, we'll let the second half of your shares run and enjoy the nice dividend during the ride.

Here's how the fully-framed trade looks on the chart...

While the hurricane recovery will be a driving force in building material demand, any global economic slowdown, especially in China, will impact copper miners.

On the upside: In addition to the anticipated natural disaster rebuild, we can look for any positive momentum on U.S. infrastructure spending to push copper miners up as well.

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The post As America's "Can-Do" Spirit Prevails, We'll Ride Alongside with This New Trade appeared first on 10-Minute Millionaire.

About the Author

D.R. Barton, Jr., Technical Trading Specialist for Money Map Press, is a world-renowned authority on technical trading with 25 years of experience. He spent the first part of his career as a chemical engineer with DuPont. During this time, he researched and developed the trading secrets that led to his first successful research service. Thanks to the wealth he was able to create for himself and his followers, D.R. retired early to pursue his passion for investing and showing fellow investors how to build toward financial freedom.

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