Technicals | May 25 2022
Bottom Line 24/05/22
Daily Trend: Up
Weekly Trend: Down
Monthly Trend: Down
Support Levels: $3.88 / $3.50 (July 2022 )
Resistance Levels: $5.17 (all-time highs)
[Note: All prices US$/oz Comex futures]
Reasons to remain bullish longer-term :
→ copper surpluses have suppressed price in the past yet strong demand now likely in a clean energy environment
→ $3.50 old resistance has potentially reverted to support
→ price action corrective since 2007, yet the move off the March 2020 lows has reverted to impulsive
→ the immediate consolidation phase is shallow and should prove bullish eventually
We are sticking to the weekly chart to cut out the noise, and we cannot emphasize enough that the impulsive bounce off the higher degree Wave-[B] low from back in March 2020, combined with the shallowness of this immediate 15-month consolidation phase, is keeping us very buoyed looking well ahead.
As discussed in our video tonight, the immediate sideways consolidation phase has morphed from a symmetrical triangle to an ascending triangle to a more simple flatter type box pattern. It happens, and is why consolidation phases can be so complex.
Yet what we are liking here overall as mentioned is the shallowness of the pattern. With it not even having retraced to the 38.2% pullback zone which would be the minimum expectation for a Wave-(2) or (B) basis our positioning of the trend. Yet shallow patterns like this generally hint to us that the sector is bullish and keen to get on with the job.
So from here, we continue to expect price action to breakout higher rather than lower. We have been talking about in previous reviews that if a bullish breakout were to occur, then the $7.00 price zone would be our minimum expectation. Minimum as that target aligns a simple A-B-C equality move occurring.
Yet there is scope for any breakout to evolve as a 5-wave pattern as well which means levels beyond $7.00 being attained eventually. This is a weekly chart we are looking at so everything takes time. So for now, we are continuing to like what we are seeing unfold, and especially moving forward from here with the 15 month consolidation phase now potentially having drawn to a close.
We were stopped out of our aggressive entry for a loss. As the consolidation pattern continued to morph, it immediately put our trade at risk. So all of a sudden our low-risk entry turned into a trade well and truly at risk of being stopped out as the pattern structures changed. And this is what ended up happening.
Yet the overall analysis remains the same which is longer-term bullish. And with the flatter type pattern now in play, the bullish trigger will be at $5.06. Which will then confirm via a move that sticks above $5.17 which is the all-time high tagged all the way back in 2011. Too early to offer up another trade just yet, although we will continue to monitor things very closely from here.
Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena's (see our disclaimer).
This report may contain advice that has been prepared by The Chartist Pty Ltd (ABN 40 641 323 051). The Chartist Pty Ltd is a Corporate Authorised Representative (CAR No. 1282007) of Shartru Wealth Management Pty Ltd ABN 46 158 536 871, AFSL 422409. Any advice is considered general advice and has been prepared without taking into account your objectives, financial situation or needs. Because of that, before acting on this advice you should therefore consider the appropriateness of the advice having regard to your situation and your own objectives, financial situation and needs. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. If the advice relates to the acquisition, or possible acquisition, of a product (other than a security e.g. a CFD) then the client should obtain the relevant Product Disclosure Document and consider it before making any decision about whether to acquire the product. Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information.
Risk Disclosure Statement
THE RISK OF LOSS IN TRADING SECURITIES AND LEVERAGED INSTRUMENTS I.E. DERIVATIVES, SUCH AS FUTURES, OPTIONS AND CONTRACTS FOR DIFFERENCE CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER YOUR OBJECTIVES, FINANCIAL SITUATION, NEEDS AND ANY OTHER RELEVANT PERSONAL CIRCUMSTANCES TO DETERMINE WHETHER SUCH TRADING IS SUITABLE FOR YOU. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN FUTURES, OPTIONS AND CONTRACTS FOR DIFFERENCE TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT ASPECTS OF SECURITIES AND DERIVATIVES MARKETS. THEREFORE, YOU SHOULD CONSULT YOUR FINANCIAL ADVISOR OR ACCOUNTANT TO DETERMINE WHETHER TRADING IN SECURITIES AND DERIVATIVES PRODUCTS IS APPROPRIATE FOR YOU IN LIGHT OF YOUR FINANCIAL CIRCUMSTANCES.
Technical limitations If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
FNArena is proud about its track record and past achievements: Ten Years On