Comex High Grade Copper Futures (HG) Technical Analysis – February 24, 2017 Forecast

May Comex High Grade Copper futures are trading slightly better early Friday after plunging sharply lower on Thursday.  The market was pressured by fresh doubts over Chinese demand. The market is now on track to close around 2 percent lower for the week.

Short-term oversold conditions could draw the attention of buyers on Friday. Strike activity at the Escondida copper mine in Chile was also offering support, although the strike “at least in the short term” has been largely factored into the market.

In other news, some traders believe that operator BHP Billiton’s decision this week to delay its legal right to replace striking workers is seen as a move aimed at sacrificing some output to undermine the union’s position.

Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is clearly to the downside. A trade through $2.6260 will change the main trend to down. This is followed closely by the next main bottom at $2.5905.

The main range is $2.4560 to $2.8360. Its retracement zone is $2.6460 to $2.6010. This zone is the primary downside target. Even if the trend turns down, we could see technical bounce on a test of this zone since it represents value to some investors.

Forecast

Based on Thursday’s close at $2.6590, the direction of the copper market today is likely to be determined by trader reaction to the uptrending angle at $2.6560.

A sustained move over $2.6560 will signal the presence of buyers. This could drive the market into a downtrending angle at $2.6760. Resides being resistance, this angle is also the trigger point for an acceleration to the upside. This will likely be short-covering unless something happens that intensifies the strike.

A sustained move under $2.6560 will indicate the presence of sellers. This could trigger a break into a pair of potential support levels at $2.6460 and $2.6435.

The angle at $2.6435 is the trigger point for an acceleration to the downside with the next target coming in at $2.6260. This is followed by the Fibonacci level at $2.6010.