Comex High Grade Copper Futures (HG) Technical Analysis – October 8, 2014 Forecast

December Comex High Grade Copper futures edged higher on Tuesday, but traders still seemed a little tentative about playing the long side. Although the market has been moving sideways, or consolidating for about two weeks, the weakening global economy is likely to mean that short-covering rather than new buying is going to drive this market higher. Since the main trend is down, this is likely to set up the next shorting opportunity.

Since reaching a low last week a little under the 3.0095 June 12 bottom at 2.9855 last week, copper has crept higher the last three days. This price action has put the market in a position to test the nearest downtrending angle at 3.0520. This price may act as resistance on the first test, however, if the buying is strong enough, this angle could be trigger point for a breakout into the short-term retracement zone at 3.0990 to 3.1255, or the next downtrending angle at 3.1320.

Since the main trend is down, look for sellers to come in on a test of this retracement zone.

On the downside, if buyers fail to show up, the market is likely to retest the June 12 bottom at 3.0095, or last week’s low at 2.9855. Taking out this level should lead to a test of the April 15 bottom at 2.9660.

Traders should watch the price action and order flow closely at 2.9660 because the daily chart indicates there is plenty of room to the downside if this price level fails as support. The next major downside is the low for the year and the March 19 bottom at 2.8845.