Comex High Grade Copper Futures (HG) Technical Analysis – February 8, 2017 Forecast

March Comex High Grade Copper futures are surging on Wednesday on short-covering and aggressive counter-trend speculative buying after workers at the world’s biggest copper mine vowed to start an indefinite strike on Thursday as talks with BHP Billiton failed to produce an agreement following weeks of collective bargaining in Chile.

Technical Analysis

The main trend is down according to the daily swing chart, however, the size of today’s range suggests momentum may be shifting to the upside. The main trend will turn up on a trade through $2.7380. A trade through $2.6120 will signal a resumption of the downtrend.

The short-term range is $2.7380 to $2.6120. Its retracement zone at $2.6750 to $2.6900 is the primary upside target. This zone is currently being tested. It’s controlling the short-term direction. Trader reaction to this zone will determine the short-term direction of copper prices.

Forecast

Based on the current price at $2.6675, the market is trading inside a minor triangle with the support angle at $2.6515 and the resistance angle at $2.6880.

If copper pulls back then look for another test of the uptrending angle at $2.6515. If it fails then the next support is $2.6165.

On the upside, resistance is clustered at $2.6750, $2.6880 and $2.6900. The last price stopped the market at $2.6910 earlier today.

If this rally is going to continue today then buyers have to take out $2.6910. If successful then look for the rally to extend into $2.7130 then $2.7255. The latter is the last potential resistance angle before the $2.7380 main top.

Holding inside the retracement zone at $2.6750 and $2.6900 will indicate the short-term fundamentals are balanced. The bears are reacting to a stronger dollar and low demand. The bulls are reacting to the strike news.

The first spike up was probably short-covering. If traders believe the strike is going to last long then will likely come in on a dip, now that some of the shorts have been taken out.