As predicted a fortnight ago, Shanghai copper futures have seen bullish momentum increase and challenged secular trend-line resistance, breaking through Fibonacci 61 per cent resistance along the way. Waning volume and open interest as prices rally suggest many are using this year’s peak to book profits. They are perhaps being too hasty because, while still needing daily and weekly closes above a series of key chart levels, we believe price action since the fourth quarter of last year constitutes a gentle but important base for copper prices over the very long term. Commodity Exchange copper futures in New York also back this view, suggesting we are setting up for another strong rally, first to 40,000 yuan and then 42,000 yuan per tonne.
