Comex High Grade Copper Futures (HG) Technical Analysis – November 29, 2016 Forecast

March Comex High Grade Copper futures surged to their highest level since the week-ending June 12, 2015 early Monday, but end-of-the-month liquidation, position-squaring and profit-taking killed the rally, triggering a massive sell-off that produced a potentially bearish closing price reversal top. Despite the pullback, copper is headed for its biggest monthly gain in more than 10 years.

Copper has been supported this month mostly on an improving outlook for demand. Increased Chinese industrial public works activity and optimism that the election of Donald Trump will spur infrastructure development is behind the demand.

Contributing to Monday’s sell-off were concerns about a speculative build-up in commodity prices.

Technical Analysis

The main trend is up according to the daily swing chart. However, the closing price reversal top and the subsequent confirmation have shifted short-term momentum to the downside.

A trade through $2.7530 will negate the reversal top. A move through $2.4350 will change the main trend to down.

The short-term range is $2.4350 to $2.7530. Its retracement zone at $2.5940 to $2.5565 is the first downside target. We could see a technical bounce on the first test of this zone.

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

Forecast

Based on the current price at $2.6330 and the earlier price action, the direction of the copper market today is likely to be determined by a pair of uptrending angles at $2.6370 and $2.6150.

A sustained move over $2.6370 will indicate the presence of buyers. They could generate upside momentum and a possible retracement back to $2.7530.

A sustained move under $2.6150 will signal the presence of sellers. The first target is the short-term 50% level at $2.5940. This is followed by a short-term Fib level at $2.5565 and an uptrending angle at $2.5250.

Look for a bullish intraday bias develop on a sustained move over $2.6370 and for the intraday downside bias to continue on a sustained move under $2.6150.