Comex High Grade Copper Price Futures (HG) Technical Analysis – Dramatic Reversal Bottom After Test of Value Zone

December Comex High Grade Copper posted a dramatic closing price reversal bottom on Friday, indicating the sell-off may be over at least temporarily.

Copper prices in Shanghai and London tumbled early Friday, pressuring the New York copper market on the opening. The price action was driven by investors slashing risk given escalating tensions on the Korean peninsula and ongoing concerns over China after a debt ratings downgrade.

Buyers took advantage of the relatively cheap prices as the market entered a major value zone. The easing of tensions over North Korea and a generally weaker U.S. Dollar also helped contribute to the dramatic turnaround.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the $3.1785 main top on September 5.

Friday’s low came in at $2.8940. This was slightly above the last main bottom at $2.8935. A trade through this level would’ve turned the main trend to down. Instead, aggressive buyers came in to defend the bottom and the uptrend.

A trade through $2.8940 will negate the closing price reversal bottom chart pattern. A move through $2.8935 will change the main trend to down. This could drive the market into the next main bottom at $2.8795.

A move through $2.9565 on Monday will confirm the closing price reversal bottom chart pattern.

The major retracement zone at $2.9150 to $2.8525 proved to be solid support on Friday because the low occurred inside this zone. The close above the zone also indicates an upside bias.

The new short-term range is $3.1785 to $2.8940. If the chart pattern is confirmed then its retracement zone at $3.0365 to $3.0700 will become the primary upside target.

A sustained move over $2.9150 will signal the presence of buyers. A trade through $2.9565 will indicate the buying is getting stronger. If this generates enough upside momentum, we could see an eventual rally into the retracement zone at $3.0375 to $3.0700.