Comex High Grade Copper Futures (HG) Technical Analysis – February 27, 2017 Forecast

May Comex High Grade Copper futures found support on Friday after Thursday’s sharp sell-off.  A successful test of a key retracement zone combined with short-term oversold conditions helped encourage short-sellers to take profits and square positions ahead of the week-end.

Fundamentally, investors also reacted to concerns over Chinese demand and a rebound in the U.S. Dollar.  Worries over the length of the strikes at the Escondida copper mine in Chile and the Grasberg copper mine in Indonesia may have prevented the market from falling further.

Technical Analysis

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

Even if the main trend changes to down, traders will still have to deal with the major retracement zone at $2.6460 to $2.6010. Since the market is starting its ninth day down from the most recent main top, we begin the session inside the window of time for a closing price reversal bottom. This means you have to be careful selling weakness.

Forecast

Based on Friday’s close at 2.6960 and the intraday price action, the major support today is a price cluster at $2.6635 to $2.6630. Watch for a technical bounce on a test of this area. If it fails as support then look for the break to extend into the next support cluster at $2.6460 to $2.6450.

If the selling is strong enough to take out $2.6450 then look for a possible acceleration into the main bottom at $2.6260, followed by the main Fibonacci level at $2.6010.

The chart shows there is plenty of room to the upside with the next major targets coming in at $2.7445 and $2.7460.

The chart pattern suggests we could see upside action today as long as the support cluster at $2.6460 to $2.6450 continues to hold as support.