CUP Buyout Rumors

By Johns Wu on Jun 02, 2006

MB wrote in to inform me about CUP. Here is what he wrote:

"Today I initiated a long position in CUP, Peru Copper Inc, (Amex). Based on today’s price & volume action (gap down at the open and closing at nearly the high of the day on the highest volume in one month), I am looking for a re-test of the 5.25 - 5.50 area sometime early next week. If that can be broken, $6.50 is the next level.

The chart is just picture perfect. The stock is above 10-day, 20-day, 30-day and 50-day moving averages. The MACD and the Stochastics just turned up/positive and are not overbought.

In case you are not aware, CUP will most likely have major news announced around June 7. Southern Copper (symbol PCU) is expected to present an offer to buy or jointly develop Peru's Toromocho copper deposit by June 7. Southern Copper had said previously that it's considering a joint venture with the deposits' owner, CUP. Also, Reuters had reported previously that CUP is open to selling a stake in the Toromocho project.

Some are even saying that PCU will make out outright bid for CUP anywhere from $8-$10 per share. No matter if this happens or not, what prompted me to enter CUP is the strong volume on the upside, and extremely bullish chart action.

Please do your own research and due diligence."

I haven't done any research on CUP, but I thought I'd pass this along. Enjoy the weekend!

This entry was posted on Friday, June 2nd, 2006 at 1:50 am and is filed under Market News. You can skip to the end and leave a response. Pinging is currently not allowed.