Technicals | Jun 22 2023
Bottom Line 21/06/23
Daily Trend: Up
Weekly Trend: Neutral
Monthly Trend: Up
Support Levels: $3.57 (July 2023 contract )
Resistance Levels: $4.38 / $4.62 / $5.21 (all-time highs)
[All prices US$ Comex futures]
Technical Discussion
Reasons to potentially revert to bullish:
→ copper has strong demand potential in a clean energy environment
→ a move above $4.38 will be a confidence boost but it has to stick
→ price action has been corrective since 2008, yet the move off the March 2020 lows reverted to impulsive
→ Wave-(2) or (B) pullback has now achieved maximum typical depth in July 2022
Another metal that we have longer-term bullish aspirations about, yet that is continuing to hesitate and lack conviction to the upside. In relation to the technical aspects of the chart though, it really is now or never. The Cup & Handle pattern symmetry-wise is pretty much perfect, yet if price drives lower below the recent low circa $3.54, then symmetry will be lost. With the handle aspect of the pattern becoming too top heavy and therefore more likely to collapse and push price lower again, possibly even back to support circa $3.16. Not ideal at all as it will mean we will be back to square one with any longer-term bullish notions put well and truly on the back burner.
From a positive point of view, if $3.54 can hold from here with price triggering a lower swing high pattern above $4.38, then a run up toward the all-time highs aligned to $5.21 will be high probability. The higher swing low trigger will also signal that it is time to check in on your favorite ASX Copper stocks. Especially those whose price action is correlated to the Copper futures chart.
Technically price has recently signaled that a Wave-2 pullback may now be completed with the breaking out of the bullish ending diagonal. A move that also coincided with the typical 61.8% retracement zone being tagged circa $3.62. We’ve reviewed Gold and Silver tonight as well, as the technical themes are very similar across all three metals at the moment. The corrective journeys have certainly been very drawn out and frustrating. Yet if all three metals are going to start making their presence felt from a longer-term bullish perspective, then right here and now is where these bullish statements need to be made. We’ve pretty much run out of time so the clock is ticking!
Trading Strategy
We are looking for a trading opportunity on the long side here, yet we first need confirmation that the proposed Wave-2 low circa $3.55 is able to continue to hold strong from here and officially lock in a low. It’s hanging in there from a technical perspective yet only just. It’s now time for price action to show its hand!
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