Copper prices no longer falling with formation of possible double bottom
The active high grade copper contract on the Commodity Exchange has possibly outfoxed miners and the media. Despite recent bad press prices are no longer dropping and a potential double bottom has formed at US$2.22 per pound. This lies just ahead of long-term channel support and secular trend line support at US$2.20 - though below support of the last decade at US$2.46. A break above here, which would tie in with a break above a skinny (meaning resistance is weak) Ichimoku cloud, would complete the formation adding weight to today's moving average crossover. We would expect a steady rally to US$2.70 - still within channel resistance.
Nicole Elliott is a technical analyst