Chart of the day: Copper scales heights in fourth quarter
It is interesting to see that volume and open interest in copper futures on the Shanghai and New York exchanges are close to their highest on record and consistently so since October. While prices are roughly at their 12-year average, they have spent this quarter consolidating in what looks like a flag chart pattern, which suggests they are ready to rally in the new year. Note how this month they have bounced strongly from Fibonacci retracement support before the 26-week moving average. In the event of a weekly close above the top of the flag, we will stick to our third measured target at 57,125 yuan (US$8,674) per tonne and will not rule out a surge to 60,800 yuan.
Nicole Elliott is a technical analyst