Comex High Grade Copper Futures Technical Analysis – January 20, 2014 Forecast

March High Grade Copper futures are trading in a tight and narrow range, but this doesn’t come as a surprise since today is a U.S. bank holiday. Today, the electronic market closes early so look for limited price movement and low volume. The light trading activity creates an opportunity to look at the weekly and daily charts.

The main trend is up on the weekly chart. The trend turned up several weeks ago when the market took out the swing top at 3.4000. The follow-through buying fell short of a major 50% retracement level at 3.4450. The new minor top is 3.4245.

The bigger picture suggests that copper may be forming an elongated support base. If the height of the market is determined by the length of the base then based on this wide range, copper may be setting up for an explosive rally. Because of the major resistance zone at 3.4450 to 3.5380, the rally is likely to be labored until this zone can be cleared.

Over the near-term, it looks as if copper is going to continue to back and fill until the buying can overcome the selling pressure. A new short-term range appears to be forming between 3.1350 and 3.4245. This creates a retracement zone and potential support area at 3.2800 to 3.2455. Since the main trend is up, buyers may step up inside this area.

Longer-term traders may want to watch how the market reacts when testing a downtrending angle at 3.3295 this week. This angle appears to be controlling the direction of the market. It should act like a pivot until solid support or resistance is established. On the downside, uptrending Gann angle support comes in at 3.3150.

The best strategy for buyers is to wait until the correction to 3.2800 to 3.2455 is completed. Then watch the order flow to see if bids are coming in.

The daily chart suggests March High Grade Copper is trading inside a triangle chart pattern. The upper level of the triangle is 3.3645 today. The support is coming in at 3.3180. The triangle chart pattern suggests trader indecision and often indicates impending volatility.

Besides the downtrending resistance angle, the market is finding resistance at a retracement zone formed by the 3.4245 to 3.2885 range. This resistance area is 3.3565 to 3.2725. On the downside, a sustained move through the uptrending support angle should trigger an acceleration into a retracement zone at 3.2915 to 3.2600.

With the daily chart down and the weekly chart up, the price action is likely to be choppy until traders can get on the same side of the market.