Comex High Grade Copper Price Futures (HG) Technical Analysis – Momentum Driving Market into $3.1325 to $3.0880 Value Zone

Speculator liquidation continued to drive March Comex High Grade Copper futures lower on Wednesday. While some traders were booking profits from the December rally, others were initiating short positions in anticipation of further downside action.

Market bulls placed some of the blame on uncertainty about supply in the market because of Chinese import restrictions on copper scrap and labor contract talks at several mines, including the huge Escondida mine. Others said the selling pressure intensified when prices broke key technical support levels. Some sellers also said that elevated net speculative long positions by hedge funds contributed to the weakness.

In other news, Chile’s state copper commission, Cochilco, on Wednesday raised its estimated 2018 average price for the metal to $3.06 per pound from its previous forecast of $2.95 per pound, pointing to the potential for global supply disruptions in the coming year.

Daily Swing Chart Analysis

The main trend is down according to the daily swing chart. A trade through $3.1785 will signal a resumption of the downtrend. A move through $3.2745.

The market is also down thirteen days from the December 28 main top at $3.3220. This puts it in the window of time for a potentially bullish closing price reversal bottom.

The main range is $2.9430 to $3.3220. Its retracement zone at $3.1325 to $3.0880 is the primary downside target. This is also a value zone.

I expect to see buyers show up on a test of the value zone. This is where we’re more likely to see the closing price reversal bottom.