Top 2 Materials Stocks That Could Collapse This January

Potential Momentum Warning Signs in Materials Sector Stocks

As of January 7, 2026, investors who prioritize momentum in their trading strategies should pay close attention to two notable stocks within the materials sector, as they may be signaling caution.

The Relative Strength Index (RSI) serves as a momentum gauge, evaluating a stock’s performance on days with price increases versus days with declines. By analyzing RSI alongside price trends, traders can gain insight into a stock’s short-term prospects. Generally, an RSI reading above 70 is viewed as an indication that a stock may be overbought.

Key Overbought Stocks in the Materials Sector

Below are two major stocks currently exhibiting overbought conditions:

Southern Copper Corp (NYSE: SCCO)

• On December 23, analyst Daniel Sasson from Itau BBA downgraded Southern Copper from Market Perform to Underperform, setting a price target of $126. Over the last month, the stock has climbed approximately 14% and reached a 52-week high of $161.59.
• RSI Reading: 71.4
• Recent Price Movement: Southern Copper shares rose 3.7%, closing at $160.08 on Tuesday.
• Edge Stock Ratings: Momentum score of 92.69, Value score of 22.95.

Freeport-McMoRan Inc (NYSE: FCX)

• On December 23, Timna Tanners of Wells Fargo reiterated an Overweight rating for Freeport-McMoRan and increased the price target from $47 to $55. The stock has surged about 25% in the past month and has achieved a 52-week high of $57.12.
• RSI Reading: 75.3
• Recent Price Movement: Freeport-McMoRan shares advanced 3.2%, ending at $56.15 on Tuesday.

Further Reading

Image credit: Shutterstock

Recent Stock Quotes

• Abercrombie & Fitch Co (ANF): $128.61 (-0.19%)
• Freeport-McMoRan Inc (FCX): $54.48 (-2.97%)
• Southern Copper Corp (SCCO): $156.40 (-2.30%)