Momentum for front-month copper futures in Shanghai at last turned bullish 10 days ago and the MACD this week is suggesting one should consider buying the contract. Interestingly, New York’s high-grade copper futures have also rallied this week to their highest level in just over two years, confirming this is likely to be a global theme. This week’s surge in Shanghai has broken clear of the top of the pennant pattern we wrote about a month ago. Hopefully on Friday, this market will close above 49,380 yuan (US$7,310) per tonne, a 38 per cent Fibonacci retracement level from 2011’s high, thus increasing bullish pressure. Our first measured target is 51,400 yuan and then 53,650 to 54,350 yuan.
