Technicals | Sep 30 2010
By Rudi Filapek-Vandyck
Carried by ongoing Fed QE2-market optimism, copper has once again climbed the US$8000/tonne mountain, and this time with a successful finish. It had been a while since copper was last seen trading above the “magical” 8k price level (more than two years).
The previous attempt, in April this year, preceded a rather sharp sell-down, so what will happen this time?
Technical market analysts at Barclays don't seem too concerned about a repeat of the April experience. Not only remains the team bullish on global equities, it remains bullish on risk assets in general, on a three month horizon, and this includes copper.
The analysts do believe that after re-conquering the $8k level, copper is probably due for a breather. They expect some range trading sessions with the metal expected to remain above US$7750/t. While the short term outlook might look choppy, the analysts believe copper looks bullish for higher prices between now and late December.
History suggests, reports the team, that copper will spend some time in surging above price peaks from the past. So it's first stop US$8210/t, and then the market will focus on cracking the next barrier. One at a time, back towards the all-time high of US$8940/t?
Fundamental analysts at Goldman Sachs and at Macquarie published positive reports on copper's price outlook this week.
