Traders are trying to decide whether the buying is strong enough to overcome yesterday’s high at $3.3155 and the December 28 main top at $3.3420. The trend is strong but some of the rally was fueled by short-covering. A pullback may be necessary to attract new buyers.
July Comex High Grade Copper futures are trading lower on Friday. Profit-taking ahead of the week-end and after this week’s spectacular rally may be behind the selling pressure. The bullish catalysts remain intact, however. A weaker U.S. Dollar and supply concerns are the main drivers of the bullish price action this week.
The main trend is up according to the daily swing chart. A trade through $3.3155 will signal a resumption of the uptrend. Today is the seventh day up from the last swing bottom so the session begins with the market in the window of time for a potentially bearish closing price reversal top.
The minor trend is also up. Today’s early weakness, however, helped make $3.3155 a new minor top.
On the upside are two main tops at $3.3040 and $3.3420.
The major retracement zone is $3.1955 to $3.1505. Trading above this zone is helping to give the market an upside bias. These levels are support.
The main range is $3.0100 to $3.3155. Its retracement zone at $3.1630 to $3.1265 is the primary downside target.
The combination of the two retracement zones makes $3.1630 to $3.1505 the best support cluster.
Traders are trying to decide whether the buying is strong enough to overcome yesterday’s high at $3.3155 and the December 28 main top at $3.3420.
If the buying isn’t strong enough then look for a pullback into at least the old main top at $3.2180 and the major Fib at $3.1955.
If $3.1955 fails as support then look for the selling to extend into at the series of retracement levels at $3.1630, $3.1505 and $3.1265.
The trend is strong but some of the rally was fueled by short-covering. A pullback may be necessary to attract new buyers.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.