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COMEX Copper Positioned To Break North

Posted by: : Paul EbelingPosted on: March 22, 2015 COMEX Copper Positioned To Break North

COMEX Copper Positioned To Break North


Despite facing many potentially Bearish factors, May COMEX High Grade Copper futures rebounded to put the market in a position to break North out of a major long-term down trending angle and swing top. On Wednesday, 18 March the main trend turned down on the daily chart and is now in a position to change the trend to Up.

Fundamentally speaking

Copper buyers have been able to overcome rising inventories indicating that either the supply numbers are wrong or strong demand is coming to market. If the market supply is less than estimates then could see be more Northside action.

The spike may not  have has to do with current supplies, but with future supplies since it is being reported that Freeport-McMoRan Inc. (NYSE:NEM) halted production at Indonesia’s Grasberg, the world’s 2nd-largest mine for the metal by capacity.

This could develop into a major event so traders must be prepared for increased volume and volatility near term, as the Short covering will likely get aggressive, and coupled with speculators buying could trigger a spike to the Northside.

Technically speaking

After a series of higher highs and higher lows since late January, May COMEX High Grade Copper turned its trend down last Wednesday when the swing bottom at 2.5925 was violated. The new swing tops are 2.7180 and 2.6905. A trade through these marks turns the main trend back Up.

A successful test of a Fibo retracement zone at 2.5690 to 2.5340 helped put in a low at 2.5525, but it was the news of the Newmont mine shutdown that forced the Short covering, thus triggering the rally. The strong close Thursday put the market in a position to crossover to the Bullish side of a major long-term down trending angle at 2.6615. A clear overtake of this angle make create enough Northside momentum to change the main trend to Up.

If Short covering and speculator buying continues then look for the rally to extend into a major 50% Fibo markl at 2.7435 and a pair of down trending angles at 2.7520 and 2.7815 Friday.

If the rally fails to change the trend to up then traders may be pricing in an early end to the production shutdown. Thus, leading to a resumption selling pressure with a possible Southside target at 2.6100.

The tone of the market Friday was determined by trader reaction to the major down trending angle at 2.6615.

COMEX Copper USd/lb. 276.10 +10.10 +3.80% May 15 17:14:59
LME 3 Month Copper USD/MT 6,045.00 +192.00 +3.28% 2015 06 19 03/20/2015

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Now, look for better-than-average volatility since this has become a news driven market.

Have a terrific weekend.


Paul Ebeling


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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

Trade FX, Equities and Options with the World's Leading Platform , call our trade desk 631 482 0376, or contact us to get started.

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