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Comex High Grade Copper Futures (HG) Technical Analysis – August 10, 2015 Forecast

By:
James Hyerczyk
Updated: Aug 10, 2015, 07:28 UTC

September Comex High Grade Copper futures sold-off on Friday, taking out the previous minor bottom at 2.3215, making a new low for the year in the

Daily September Comex High Grade Copper

September Comex High Grade Copper futures sold-off on Friday, taking out the previous minor bottom at 2.3215, making a new low for the year in the process. There wasn’t much follow-through to the downside after the bottom was taken out with the market stopping at 2.3130. Enough buyers came in at this level to trigger a mild short-covering rally into the close. This suggests that the selling was likely triggered by sell stops rather than fresh shorting.

If the short-covering continues today then look for buyers to drive the market into a downtrending angle at 2.3490. The next angle over this price is 2.3650. These angles are important because they have provided resistance and guidance since they were formed on June 10 and June 29 respectively. Taking out this angles with conviction will signal a shift in investor sentiment to the upside.

Daily September Comex High Grade Copper
Daily September Comex High Grade Copper

The new short-term range is 2.4460 to 2.3130. Its pivot at 2.3795 is also controlling the short-term direction of the market. Crossing to the strong side of this pivot will signal the presence of buyers. This could create enough upside momentum to trigger an acceleration into the main top at 2.4460.

A trade through 2.4460 will turn the main trend to up on the daily chart. This is also a potential trigger point for a sharp breakout rally. The main range is 2.6550 to 2.3130. Its retracement zone at 2.4885 to 2.5275 is the next major upside target.

On the downside, if sellers come in today with more vengeance and 2.3130 is taken out with conviction then look for a possible extension of the break into the May 14, 2009 bottom at 2.2440.

Because copper has been in a prolonged downtrend in terms of price and time, it is ripe for a closing price reversal bottom. Additionally, this makes us want to give the market a little room to the upside before looking for the breakout. Therefore, the direction and tone of the market today is likely to be determined by trader reaction to the pivot at 2.3795. 

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.

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