Chart of the day: Shanghai copper on bull run
We have been focusing on metals over the past few months and have warned that should Shanghai copper futures close above Fibonacci retracement resistance at 38,500 yuan per tonne, a break higher would ensue. We had not realised just how much pent-up bullish pressure had gathered and are awestruck by last week’s phenomenal rally. Something similar was seen in the high-grade copper contracts on the Commodity Exchange in New York, which rallied from US$2.08 to US$2.70 per pound in three weeks. Rising open interest and very strong bullish momentum should set up for further rallies to the 49,000-yuan area, just ahead of the psychological 50,000 yuan per tonne. More importantly, price action since November last year marks an important secular low point.
Nicole Elliott is a technical analyst