Comex High Grade Copper Futures (HG) Technical Analysis – October 1, 2014 Forecast

The attempted rally by December High Grade Copper failed once again on Tuesday at a long-trending angle at 3.0580 today. Sellers then proceeded to take out the June 12 bottom at 3.0095. The close under this level gives the market a downside bias today.

Crossing to the bearish side of a steep downtrending angle from the 3.2120 top at 2.9920 will indicate extreme selling pressure and weakness. The daily and weekly charts indicate there is plenty of room to the downside with potential targets at 2.9660 and 2.9540.

Recapturing 3.0095 will indicate the selling pressure is getting weaker. This could be the first sign of short-covering. Recovering an old bottom after taking it out usually indicates that the breakdown was caused by sell stops rather than fresh shorting.

Short-sellers have gotten used to selling rallies into the angle at 3.0580. This angle has stopped the rally the past six sessions. It may continue to serve as resistance, but if it is taken out with conviction then watch for a huge short-covering rally into at least 3.1000.

The tone of the market today will be determined by trader reaction at 3.0095. Short-sellers will either press this market to the downside under this angle, or recapture it and trigger a short-covering rally.