We’ve been tracking Copper since February’s breakout, in hope of timing the end of its correction. We suspect that time may have come.
Copper’s breakout in February took the metal to a 7-month high and confirmed a double bottom reversal which, if successful, projects an approximate target around $3.19. Furthermore, the breakout coincided with the week that large speculators flipped to net long, and the rally was fuelled by combination of short-covering and newly initiated long positions. All in all, a healthy week for a breakout.
The trend structure has been firmly bullish since the January low, and the third prominent higher low failed to test a trendline to show an increase of underlying momentum. And now that prices have gently retraced and found support above the $2.87 breakout level and the 20-day eMA, we suspect its correction has completed.
Monday’s bullish hammer above key support hints at a swing low and yesterday’s bullish inside candle has been confirmed with today’s break above the hammer high. Put together, we momentum appears ready to realign itself with the dominant trend, have another crack at $3.00 and extends its bullish trend.