Technicals | Oct 21 2010
By Rudi Filapek-Vandyck
Gold is looking dodgy, and so does crude oil, but the one commodity asset standing out in a negative sense right now is copper, report technical commodity analysts at Barclays Capital.
The analysts believe the bounce back in copper futures on Wednesday, carried by general relief across risk assets in general, won't change the fact that copper is likely to reverse trend in the medium term. Investors still looking to jump on board of this runaway QE2-fueled risk assets rally should maybe pay attention?
One of the factors fueling Barclays' analysts view is that copper broke below two month trendline support (now at US$8377/tonne) plus the fact that Tuesday's price action placed a so-called "bearish engulfing candle" on price charts, and the latter happened on the largest market volume since 05 May this year.
This, suggest the analysts, indicates a near-term turn in trend.
However, against the old April highs and previous "congestion" in the US$8010/8045 zone, the analysts also believe any pullbacks are likely to remain corrective within an ongoing positive trend.
