Technicals | Jan 15 2014
Bottom Line: 14/01/14
Daily Trend: Neutral
Weekly Trend: Up
Monthly Trend: Up
Technical Discussion
We've remained bullish Copper longer term now for an extended period of time, yet continue to stress the importance of exercising patience. The price patterns have clearly been telling us not to jump in too early and we have heeded the advice. The pattern in question though has now almost been 3 years in the making and by all accounts is highly evolved. In fact from a timing perspective, there is a part of me that is also quite cautious that pattern completion has taken too long. And when this happens it throws up the question that a topping out pattern is what is actually evolving, and obviously this will see the Bears run rampant if it proves to be correct. [USc/lb] 300 simply has to hold along with pattern completion taking place within the next month or so at the latest. If one of these areas fails on us, then after all this time we may have to red flag it!!
For now we are sticking to our ongoing rhetoric. A larger descending A-B-C-D-E triangle now looking to complete its 5th swing lower within the final Wave-E. As mentioned though, 300 must continue to hold as part of this process. I'm liking the rejection price bar witnessed on the 24th December as the Wave-D completion point, with all price action since then part of the last stage lower. To this point the Wave-E continues to look underdone in depth as well as from a timing perspective which basically says we still wish to see lower so this 5th swing down can become more clearly defined. 320 has recently revealed that some demand lurks in this area, and within the definitions we have forwarded here, such a move would be more than acceptable as a final completion point as a minimum target. Emphasis on the word minimum. Copper has some decent upside attached to it over the coming years if we are interpreting this correctly.
Trading Strategy
As stated, we are sticking to the bullish longer term rhetoric, whilst at the same time noting we are running out of time. I'm already of the opinion this has become too top heavy. So if price is going to prove itself within our analysis, then it really has to do so quickly over the next month or two. Preferably even sooner. As mentioned though, the upside if we are right will be quite substantial, with the trigger being above the Wave-D high circa 345, so long as we get the desired depth we are looking for within the Wave-E. Regardless of outcomes, 2014 certainly looks like it is going to be a defining year for this high profile industrial metal.
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