Technicals | Nov 16 2017
Bottom Line 15/11/17
Daily Trend: Down
Weekly Trend: Up
Monthly Trend: Up
Support Levels: 288 / 250 / 241
Resistance Levels: 340 / 350 / 388
Technical Discussion
Since tagging [USc/lb] 326.00 late last month, Cooper prices have continued to be soft, and yesterday's weak data coming out of China was just another excuse for the sellers to stay involved. Yet the metal has risen around 25% in 2017 thus far which has put it close to 3 year highs, and this has been backed by strong demand coming out of China. It's the technical aspects of the chart that we like the best though, and we will continue to remain buoyed about what we are seeing, so long as 280.00 remains robust and supportive. We continue to stick with the weekly chart in our reviews so lets take a closer look.
Reasons to be bullish longer term:
→ 280 ideally looking to revert to support.
→ surpluses reducing or reverting to deficits being monitored
→ price now looking committed to staying above the 200 day MA (see daily chart)
→ longer term bullish reverse head & shoulders triggered at 289 (see weekly chart)
Simply put on the weekly chart, the bullish reverse head and shoulders pattern is what we are continuing to keep a close eye. The pattern broke out strongly above the neckline in late July and this was backed by strong lead in volume as well as strong volume post the break. So within a couple of months we witnessed price move from 280.00 up the aforementioned highs circa 326.00. The big feature that appeared on the chart though post the higher swing low pattern that triggered to achieve these highs, was the strong Type-A bearish divergence. So with this now having triggered off the rejection price bar in late October, we continue to believe that lower is still going to be necessary to unwind this indicator fully, and of course having the purpose to shake out the weaker hands. The reverse head and shoulders pattern continues to target 387.00, so if we can time a trade basis this immediate bout of weakness, then the next run higher may well be a very rewarding one.
Trading Strategy
We've recently had a break even trade on Copper yet as per our review tonight we will be on the look out to capture the next proposed move higher if price continues to head down towards the demand zone over the coming weeks. As part of this process it would be ideal to see our weekly divergence indicator unwind back to oversold as stated. Not sure we will get back to a full blooded retest of the neckline circa 280.00, yet if we do see strong buyer support coming back into play around the 290.00 – 295.00 price zone, with volume starting to pick up again, then the Copper chart will certainly be back on our trading radar.
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