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Comex High Grade Copper Futures (HG) Technical Analysis – December 5, 2016 Forecast

By:
James Hyerczyk
Published: Dec 5, 2016, 07:17 UTC

March Comex High Grade Copper futures rallied early Monday after a report showed growth in China’s services sector accelerated to a 16-month high in

high-grade-copper

March Comex High Grade Copper futures rallied early Monday after a report showed growth in China’s services sector accelerated to a 16-month high in November. The survey, along with solid factory activity reports last week, suggest the economy is building momentum into the end of the year after stabilizing most of 2016.

A survey of manufacturers last week suggested prices are rising at the fastest pace in over five years, with higher commodity prices contributing to a boost in industrial profits.

However, some say the increases are unsustainable because prices are rising at the fastest pace in over five years. The price pressure likely reflects currency moves and the bounce in commodity prices. This is bound to weigh on investment especially at a time when financial conditions are tightening.

Technical Analysis

The main trend is up according to the daily swing chart, but the double-top at $2.7440 and $2.7530 suggests the selling may be greater than the buying at current price levels. A trade through these tops will signal a resumption of the uptrend.

A move through $2.5505 will turn the main trend down. This could trigger a further break into the next main bottom at $2.4350.

The main range is $2.0970 to $2.7530. Its retracement zone at $2.4250 to $2.3475 is the primary downside target.

The intermediate range is $2.7440 to $2.4350. Its retracement zone at $2.5940 to $2.5565 provided support last week when the market reached a bottom at $2.5505.

The short-term range is $2.7530 to $2.5505. Its retracement zone at $2.6520 to $2.6760 is the primary upside target. It is currently being tested. This zone is important to the structure of the chart pattern because sellers are going to try to produce a secondary lower top, while buyers are going to try to drive the market through this zone in an effort to make $2.5505 an important main bottom.

daily-march-comex-high-grade-copper
Daily March Comex High Grade Copper

Forecast

Based on the current price at $2.6565 and the earlier price action, the direction of the copper market today is likely to be determined by trader reaction to the downtrending angle at $2.6530.

A sustained move over $2.6530 will indicate the presence of buyers. This could generate enough upside momentum to challenge the Fib level at $2.6755 and a pair of downtrending angles at $2.7030 and $2.7280.

A sustained move under $2.6515 will signal the presence of sellers. The daily chart is open to the downside with the next target a 50% level at $2.5940. This is followed by an uptrending angle at $2.5650 and a Fib level at $2.5565. This is the last major support before the main bottom at $2.5505. Taking out this bottom will change the main trend to down.

Watch the price action and read the order flow at $2.6530 and $2.6515 today. Trader reaction to this area will tell us if the buying is getting stronger or if the sellers have returned.

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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