Southern Copper Corporation (PCU: sentiment, chart, options) was smacked with a downgrade this morning, and plunged more than 4% on the bearish news. Specifically, UBS lowered its rating to "sell" saying that "2009 will be a bad year for PCU." The brokerage firm continued to say that because one of the company's Mexican mines, Cananea, remains shut, "we believe Southern Copper will disappoint on both volume and costs."

UBS joins the bulk of bearish brokers. Zacks reports that only 2 analysts currently rate the shares "strong buy," while the other 6 are sitting in the bears' lair, giving them a "sell" or worse rating.

While the stock has outperformed the S&P 500 Index (SPX) by nearly 40% during the past 60 trading days, and is up 61% from its November 2008 low, I cannot fully understand the bearish attitude. The equity is currently finding support from its 10-week moving average. This trendline helped pressure the shares lower on its descent from May 2008 through November.

Furthermore, short interest is extremely high, especially for a security that is gaining ground. These bears have sold short more than 18.39 million shares, accounting for more than 9.36% of the company's float. With the stock in an uptrend, if these pessimistic investors begin to buy back their shares, it could take almost 5 days at the stock's average daily trading volume for these bets to unwind. This could provide ample fuel for a short-covering rally and add more buying pressure to the shares.