Chart of The Day Copper
Copper Probable Price Path & Potential Reversal Zone
The reflation theme appears well and truly alive, propelled forward by gains in the commodity complex. The deep freeze in Texas took centre stage yesterday, particularly with many Asian markets still closed and the US market out for Presidents’ Day. The ongoing freeze in Houston has resulted in the complete shutdown of some oil refineries in the Gulf region, in addition to curtailing electricity output to households and businesses. WTI closed above $60 for the first time in more than a year as a result of the weather crisis. Brent added 1.4% on the day to close at $63.30/bbl. Meanwhile, copper continued to climb and closed at a fresh 8- year high yesterday.
From a technical and trading perspective, Copper is entering an area that may prove to be the catalyst for a corrective phase to develop. Counter trend player will be paying close attention to the price action at the 3.92/4 level, this area represents the monthly R3 pivot point, the primary projected ascending trendline resistance and projected weekly range resistance, it is also noteworthy that we currently have, momentum divergence developing, while this divergence remains in play, watch for bearish reversal patterns from the reversal zone to deploy counter trend short exposure, initially looking for a retest of 3.70 from above enroute to an ideal 3.50 test of the primary trendline support. A successful test and hold of this level would allow position reversal to align with the dominant uptrend.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!