Chart of the day: Steel set for rebound?
Steel bars embedded in concrete are a mainstay of modern construction methods. The derivative contract for rebar, as it is called, was introduced to the Shanghai Futures Exchange in 2009 and volumes have picked up steadily ever since. What is striking is that as prices have drifted since 2011’s peak, holding a neat channel, volume has marched relentlessly higher, underscoring its use in hedging by professional users. This month, we have seen tiny signs of a basing attempt ahead of the psychological 1,500-yuan level. It is no longer as oversold as in mid-December while momentum and the MACD are now marginally bullish. Many obstacles to progress abound but it might just be time to consider an important turn in the trend.
Nicole Elliott is a technical analyst