Comex High Grade Copper Futures (HG) Technical Analysis – August 27, 2015 Forecast

December Comex High Grade Copper futures failed to follow-through to the upside, following Tuesday’s strong close. This made buyers nervous, leading to a sharp break on Wednesday. The selling wasn’t strong enough to take out the multi-year low at 2.2025, however, indicating the presence of buyers.

The first rally from the low was likely short-covering which drove out the weak shorts including those who sold in the hole earlier in the week when the market took out the May 14, 2009 bottom at 2.2440.

The close was weak enough to suggest a follow-through move to the downside, but the two day consolidation would continue as long as the low holds at 2.2025.

Based on the close, the only support to watch is 2.2025. Crossing to the weak side of the steep downtrending angle at 2.1950 will put the market in an extremely weak position with the April 28, 2009 main bottom at 2.1740 the next likely downside target.

The short-term range is 2.2025 to 2.3040. Its 50% level or pivot is 2.2535. This price is controlling the short-term direction of the market.

Crossing to the bullish side of a downtrending angle at 2.2405 will be the first sign that buyers are coming in to support the market. Overcoming the pivot t 2.2535, however, is likely to trigger an acceleration to the upside with the next target a resistance cluster at 2.3150 to 2.3190.

The main range is 2.4350 to 2.2025. Its 50% level is 2.3190. Look for selling on the first test of this level, but be prepared for an upside breakout and another acceleration if this price is taken out with conviction. The next target over this price is a downtrending angle at 2.3750.

Trader reaction to two levels today will determine the tone and direction of the market. The first is 2.2535, the second at 2.3190. Watch the price action and read the order flow at these levels. This will tell us if the sellers are still in control, or if the strength has shifted to the buy side.