A Long Term View On …. Copper
- Posted by Greg Harmon
- on December 13th, 2012
Doctor Copper, the metal with a PhD in Economics as they say, has long been used as a barometer of the strength of the economy. Chairman Bernanke and his Federal Open Market Committee gave us their latest view on the future of the economy today. Prognosis: weak growth with low rates expected for at least another 2 years. How does the good doctor respond? The daily chart responds by showing movement from one symmetrical triangle to another one slightly higher. Currently at the top rail of that triangle and with support for a move higher from a bullish Relative
Strength Index (RSI) and a positive Moving Average Convergence Divergence indicator (MACD) the prospects are good for a move higher. A break above the triangle carries a Measured Move higher to 4.35 but clearly there is a lot of congestion to work though between the current 3.75 and 4.00 first. This could take some time. Moving out to the weekly view shows that it is the retest of the 23.6% Fibonacci after touching the 50% Fibonacci that is controlling the present, with 4 touches since the peak. It also shows the importance of the 4.15 level along the way as the parallel symmetrical triangle. if one thing is clear on this timeframe it is that the trend over the last 2 years
has been sideways with a tightening range. It also raises the target on the break above the top rail to 4.80 and then 6.00 over the bigger triangle. The RSI currently supports a push higher but has been oscillating around the mid line with a MACD that is flat. If it goes higher there is support but not a strong impetus to get there. Finally on the monthly timeframe the price is firmly in the middle of the Median Line and Lower Median Line of the bullish (green) Andrew’s Pitchfork. This means it could be attracted either way and with the RSI flat at the mid line and the MACD negative but
improving, there is no really bias. The one solid positive for Copper is that the bullish Pitchfork is taking control away from the bearish (red) one. If the Median line wins then there is a lot of upside potential. But nothing to do until then. So Copper agrees with Bernanke. Muddling along for now with some potential.So look for a beak above 3.75 to get the ball rolling higher and over 4.00 to give it more momentum. From there 4.35, 4.80 and 6.00 become important targets.
This is the fifth in a series of A Long Term View On …. articles that will appear of the next few weeks.
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- Earnings Trade Ideas for Pandora
- Premium Earnings 2-11-16
- The History of the World of Stocks and Bonds
- NYC Traders EXPO February 21-23
- Earnings Trade Ideas for Twitter
- Premium Earnings 2-10-16
- Is the Bond Run About to End?
- Premium Earnings 2-9-16
- The Head and Shoulders in the Nasdaq Looms Large
- Stalking an Entry on Constellation Brands