Chart of the day: Zinc’s got zing
The outlook for commodities is mixed this year, with the World Bank expecting them to surge while Agrimoney.com forecasts grains to fall and Australia prices for a sharp drop in iron ore prices. Of the base metals traded on the Shanghai Futures Exchange, zinc presents probably the most interesting chart pattern. Having traded smartly higher last year, retracing half of the slump from 2007’s record high of 35,590 yuan (US$5,166) per tonne, it has been working inside a right-angled triangle this year. This week’s little hammer candle against its lower edge and above the 50 per cent retracement suggests a break higher is imminent and all aspects of the Ichimoku system are bullish. Measured targets lie at 27,000 yuan and 28,650 yuan.
Nicole Elliott is a technical analyst