Technicals | Apr 20 2010
By Chris Shaw
The technical analysts at Barclays Capital are now cautious on copper for the short-term, suggesting the charts indicate further near-term corrective weakness before any resumption of the larger bull trend.
According to the analysts the daily chart has formed a head and shoulders top, which when combined with bearish divergences indicates prices have reached a near-term high.
Support is at US$7,625 per tonne but the analysts suggest any break of this level clears the way for a move to within the range of US$6,850-$7,255 per tonne. This level represents congestion support as it includes the March lows, the February/March open gap and 14-month channel support.
Resistance near-term is seen from the head and shoulders neck line at US$7,847 per tonne, while a further bullish move requires prices overcoming the right shoulder high at US$7,996 per tonne.
From a big picture perspective the analysts at Barclays suggest the big picture bull trend remains intact, with prices to eventually return to pre-crisis peaks near US$8,620-$8.940 per tonne.
