A Deep Dive into Copper

Copper comes with a big reputation. Some consider it the metal with a PhD and call it Dr. Copper, a metal that can predict the future of the economy. Others do not go quite as far but recognize its value as an industrial metal and use in home building and construction. And of course there are those that see the only use as a mug for containing a Moscow Mule.

Whichever view you take there are some interesting bits of information in the chart of Copper prices to review. The long term chart of monthly prices below shows all of them. This chart shows 17 years of price data with each bar a month of price action. The first item to notice is the trendline rising from the 2002 low. This acted as support through mid 2003 and then again on a pullback to the 2008 Financial Crisis low. Finally it held on a pullback at the end of 2014 before the price of Copper broke down below it in the middle of 2015. Now, rising again, the price is back at that trend line, acting as resistance this time. A break above this would be a very bullish event.

Now look at that break down in 2015. The price got there after falling out of a descending triangle in 2014. It in fact bounced to retest the break down level before moving lower through the trend line. The price never made it to the target move, down to 1.40. It stalled at 2.00, a big round number, and held there for a year before reversing. Not making the target is also a show of strength. And look where it stalled, just as it broke under its 200 month SMA. This moving average acted as support at the 2008 low and it had not been below it for 11 years. Now back above it has reset.

Then there is the price action since the 2014 break of that triangle. It has traced out an Inverse Head and Shoulders pattern. The pattern triggered in July this year as the price rose through the neckline. This pattern gives a price objective to at least 3.80 above. Momentum is quite supportive of a move higher with the RSI rising in the bullish zone and the MACD moving up and positive. Finally, look at the volume pattern since the 2009 low. It has been constantly rising and accelerated as it started this latest leg higher. Copper looks set to continue higher for some time.

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.

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