Comex High Grade Copper Futures (HG) Technical Analysis – November 24, 2015 Forecast

March Comex High Grade Copper futures are trading slightly higher during the pre-market session. Light short-covering and position-squaring following yesterday’s sharp sell-off are behind the technical bounce. The fundamentals remain bearish, but technical factors indicate oversold conditions.

Oversupply and weak demand are behind the recent steep sell-off. Although the major producers have been cutting production, the smaller, local producers are maintaining their production levels in order to maintain cash flow. Demand is down because of the stronger U.S. Dollar and the economic slowdown in China.

If there is a rally, it is likely to be triggered by technical factors so gains are likely to be limited.

The main trend is down according to the daily swing chart. The new minor range is 2.1000 to 2.0020. Its pivot at 2.0510 is one price that is controlling the short-term direction of the market. The other is a steep downtrending angle at 2.0895.

A sustained move over the pivot at 2.0510 will signal the presence of buyers. This could create enough upside momentum to challenge the angle at 2.0895. Since the trend is down, sellers are likely to come in on the first test of this angle. Breaking out above the angle will indicate the short-covering is getting stronger.

If a main range forms between 2.3695 and 2.0020 then its retracement zone at 2.1860 to 2.2290 will become the primary upside target.

Taking out 2.0020 will signal a resumption of the downtrend. There is no bottom in sight, but the market is in the window of time to form a potentially bullish closing price reversal bottom.

Watch the price action and read the order flow at 2.0510 today. Trader reaction to this number will likely set the tone of the market today on the upside. Trader reaction to 2.0020 will set the tone of the day on the downside. An inside day today will indicate trader indecision. It may also indicate the market is going through a transition period, indicating impending volatility.