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Copper Threatening Breakout Above Resistance

I had a request from member @vim2 for an update on copper. Here's my 10 year weekly chart of $COPPER (spot copper prices). Copper has been gradually moving higher since putting in a divergent low around the beginning of the year & breaking out above this bullish falling wedge pattern shortly afterwards. Prices are currently up against a minor downtrend line (R1) which a move up to the R2 level (2.44ish) quite likely if R1 is taken out. Should copper fail to take out the downtrend line resistance at this time, look for any pullbacks to be contained at either S1 (2.00) or S2 (1.90ish) in order to keep the longer-term bullish outlook intact.

$COPPER weekly July 22nd

$COPPER weekly July 22nd

I've also included a chart of JJC (copper ETF) with some key support & resistance levels to watch.

JJC daily July 22nd

JJC daily July 22nd

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Jul 22, 2016 10:11am|Categories: Gold & Commodities|Tags: , |4 Comments

4 Comments

  1. snp July 22, 2016 11:53 am at 11:53 am

    patina: price agrees there is no alternative

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  2. bronson1957 July 24, 2016 7:57 pm at 7:57 pm

    thx Randy…..I like the looks of this one. low risk looking from the bigger pic. thx for sharing

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  3. lake4 July 26, 2016 5:56 am at 5:56 am

    Randy, could you comment on using the above 2 charts for a buy signal on FCX and TCK. Thanks for the charts.

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    • rsotc July 26, 2016 9:14 am at 9:14 am

      @Lake4 While a breakout & sustained rally in copper should be bullish for FCX & TCK generally speaking, it might not be at this time. First of all, if $COPPER takes out that downtrend line, the next significant resistance level isn’t too far overhead. Second, those copper stocks have rallied a lot more than copper & look to me that they have likely gotten ahead of themselves & at best, might need a little more time consolidating (which they have been doing) or at worst, could drop from here for a while.

      Most important would be to confirm any breakout in copper with either a breakout or a bullish trend in FCX or TCK. While I don’t have a strong opinion on FCX, I can say that TCK looks to me as a nice short setup, so nice that I might even short it personally and/or add it as an official trade idea. I’ll follow up with my reasoning, including my daily & weekly charts in another post but essentially, TCK is in what appears to be a mature bearish rising wedge pattern on the daily chart, confirmed with negative divergences, while very overbought and at key downtrend line resistance on the weekly time-frame. Bottom line: I’m near to intermediate-term bearish, longer-term bullish. Charts to follow soon.

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