Entering 2026, specific stocks within the materials industry are showing technical signals that could raise caution among momentum-driven investors. Two notable companies, Southern Copper Corp (NYSE:SCCO) and Freeport-McMoRan Inc (NYSE:FCX), have recently exhibited characteristics indicative of overbought status based on their Relative Strength Index (RSI) values.
The RSI serves as a widely used momentum indicator calculated by comparing the magnitude of recent gains to recent losses over a defined period. Typically, an RSI above 70 suggests that a security might be overbought, potentially foreshadowing a pullback or period of consolidation. By juxtaposing the RSI with stock price movements, traders and investors can better assess the likelihood of short-term trend reversals.
Southern Copper has attracted increased market attention, partly influenced by a recent downgrade issued on December 23, 2025. Analyst Daniel Sasson of Itau BBA adjusted Southern Copper's rating from Market Perform to Underperform, alongside setting a price target of $126. Despite this revision, the stock has surged approximately 14% over the last month, closing at $160.08 on January 6, 2026. It hovers near its 52-week high of $161.59. The RSI value measured 71.4, surpassing the conventional overbought threshold.
From a quantitative perspective, Southern Copper's momentum score stands notably high at 92.69, reflecting strong short-term price strength. Conversely, its value metric is markedly lower at 22.95, indicating less favorable valuation characteristics. This juxtaposition of strong momentum with weaker value scores may influence investor decisions differently depending on their strategy focus.
Meanwhile, Freeport-McMoRan also presents an intriguing case. As of late December 2025, analyst Timna Tanners from Wells Fargo reiterated an Overweight rating on the company and elevated the price target from $47 to $55. This upgrade corresponds with Freeport-McMoRan’s substantial approximate 25% rise in share price over the previous month. The stock closed at $56.15 on January 6, 2026, approaching a 52-week peak of $57.12. Its RSI registered at an even higher level of 75.3, signaling a stronger overbought condition relative to Southern Copper.
Considering momentum analytics, Freeport-McMoRan carries a momentum-oriented ranking that highlights its recent performance strength. Additionally, typical trading patterns reveal these gains have come amid positive analyst support, potentially corroborating bullish sentiment in the near term despite overbought readings.
The combined information underscores a complex environment for materials sector investors. While both Southern Copper and Freeport-McMoRan have demonstrated considerable price appreciation backed by favorable analyst commentary and robust momentum measures, their elevated RSI levels may caution against unchecked optimism. Stocks crossing well above traditional overbought markers historically warrant close monitoring for possible corrective price action.
Investors integrating technical momentum tools should therefore maintain vigilance in these cases, balancing quantitative indicators with fundamental analyst insights. The contrasting signals of price momentum and value assessments particularly highlight the nuanced decision-making landscape in materials equities at this time.