Copper Inflects off Support – Daily and Weekly View

Apr 25, 2009: 11:30 AM CST

A lot of analysts have been watching copper for signs of life that might signal an early recovery is in the works.  Let’s look at Copper’s Weekly and Daily chart for clues.

Copper Weekly

Last week, I posted the ambitious post “Copper Comes into Confluence Resistance,” and price fulfilled my expectations for a downswing off the confluence resistance of the 50 week and 200 day moving averages.

On the weekly chart, it would seem we have a bit of room to run down to test the rising 20 week EMA at $185, but the daily chart gives a possible argument for a bounce off current levels.

Zooming in, we see a very positive trend structure for Copper Prices, having been officially confirmed now as being in an uptrend.

First, price came into key resistance via the 200 day SMA which held last week which resulted in the swing down to the $200 level.  Now, price appears to be finding support at the rising 20 day EMA, and if bulls hold that level, then odds favor a break above the $220 resistance into new highs.

A new momentum high has formed, which hints that a new price high is yet to come.  This would set up the “Impulse Buy” trade (which suggests to buy the first pullback into the 20 EMA after a new price and momentum high).

On a separate note, I mentioned that the US Dollar Index might be experiencing a Bear Flag sell signal, which would further be bullish for Copper and other commodities.

Let’s keep watching Copper closely for continued signs of life, or to see if buyers are unable to hold these levels as expected.

Corey Rosenbloom, CMT
Afraid to Trade.com

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7 Comments

7 Responses to “Copper Inflects off Support – Daily and Weekly View”

  1. Anonymous Says:

    Corey, did you mean to imply using UDN if the dollar drops?
    Jack D

  2. Aaron Says:

    What is a good ETF that tracks this?

  3. Corey Rosenbloom Says:

    Jack,

    I went back and clarified to mention shorting the UUP or buying UDN. Thanks for pointing that out!

  4. Corey Rosenbloom Says:

    Aaron,

    One might use the Dow Jones iShares total return fund – JJC – but if anyone has suggestions, please feel free to post.

  5. Anonymous Says:

    Check the rounding top formation on DJIA?

    your thoughts

    http://man4urheart.blogspot.com/2009/04/djia-rounding-top.html

    man4urheart

  6. Tan Haw Swee Says:

    Hi, corey

    That pieces of info made me feeling very comfortable, I am on my way to cash out when the time is right, Thank you very much. By the way I wish that you can continue to feed us your analysis on copper in a few days time.

  7. Tan Haw Swee Says:

    Today, I saw the daily copper graph has ticked up, you are right my dear friend.
    Based on the monthly chart, I would assume that the copper will continue to bull/ soar up to 2.3500 by somewhere in middle of June and follow by a tumble near early July. Please comment on this, Thank you.