Comex High Grade Copper Price Futures (HG) Technical Analysis – Direction Determined by Trader Reaction to Fib Level at $3.0930

December Comex High Grade Copper fell to its lowest level since October 11 on Wednesday before closing higher. The technical closing price reversal bottom suggests that buyers may have come in to defend a key retracement zone.

Prices fell in reaction to news on China copper imports. According to Reuters, China’s unwrought copper imports fell in October from a month earlier to their lowest since April as prices soared to their highest in more than three years, while concentrate arrivals also slipped, customs data showed.

Daily Swing Chart Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since October 16 when it hit a multi-year high at $3.2595. A second sign of weakness occurred on October 24 when a secondary lower top was formed at $3.2390.

Although sellers took out a recent low at $3.0730, the selling stopped at $3.0665. This was enough to spook a few of the short-sellers into covering their positions to form a closing price reversal bottom.

The chart pattern could be an early indication of a shift in momentum to the upside. At a minimum, this move could trigger the start of a 2 to 3 day rally.

Daily Retracement Zone Analysis

The main range is $2.9260 to $3.2595. Its retracement zone at $3.0930 to $3.0535 is providing support. On October 27, the zone stopped the selling at $3.0730 and again yesterday at $3.0665.

Holding the Fibonacci level at $3.0535 is a sign that buyers are coming in to defend the trend. Closing over the 50% level at $3.0930 may be an early sign that the buying is strengthening.

The new short-term range is $3.2595 to $3.0665. If the momentum shifts to the upside then look for a test of its 50% level or pivot at $3.1630. This price will ultimately decide the near-term direction of the copper market.