Chart of the day: Steel steals a march
January has been a good month for base metals, though not for the London Metal Exchange which has had further trouble with top management, and Shanghai steel rebar futures are marching up towards our target at 3,500 yuan per tonne. At this point expect a little hesitation because it is a 50 per cent retracement resistance level of the massive drop in prices between 2011 and December 2015’s low. The contract is also currently overbought though momentum is strongly bullish. Therefore expect some toing and froing between the psychological levels at 3,000 and 3,500. A weekly close above the latter should set off another bullish leg to 4,000; a weekly close below 2,900 forces a review.
Nicole Elliott is a technical analyst