Advertisement
Advertisement

Comex High Grade Copper Futures (HG) Technical Analysis – February 4, 2016 Forecast

By:
James Hyerczyk
Published: Feb 4, 2016, 12:55 UTC

March Comex High Grade Copper is trading higher shortly before the regular session opening. The market begins today’s session in the middle of nowhere,

Daily March High Grade Copper

March Comex High Grade Copper is trading higher shortly before the regular session opening. The market begins today’s session in the middle of nowhere, but with strong upside momentum behind it. The market is being driven by the weaker U.S. Dollar since it is a dollar-denominated commodity and massive short-covering ahead of the start of the Chinese Lunar New Year on February 8.

Massive cuts in copper mine production this year may have put in a floor under the price of the metal, but I don’t think its driving prices higher. Traders that follow cuts in production don’t like to chase prices higher. They prefer to buy the breaks. The market won’t go up forever either since there are still major concerns about demand growth especially in China.

Daily March High Grade Copper
Daily March High Grade Copper

Technically, the main trend is up according to the daily swing chart, but because of the prolonged move up in terms of price and time, the market begins today’s session in a position to post a rally-ending closing price reversal top. Because of the earlier higher-high, yesterday’s close at 2.0950 becomes important throughout the day. A close under this level will signal the start of a possible short-term top.

The daily chart indicates there is plenty of room to the upside with the first target the December 30 top at 2.1485. This is followed closely by the major 50% level at 2.1525.

On the downside, the market is also wide open with the nearest support a Fibonacci level at 2.0670.

With potential targets at 2.1485 and 2.0670, we’ll focus more on the chart pattern rather than the price level. Bullish traders will want to see a higher-high and a higher close. Bearish traders will want to see a closing price reversal top.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement