Chart of the day: Dalian iron ore set for rally
Since the second quarter of 2017, Dalian iron ore futures prices have been held in a vice-like grip, stuck between 50 per cent retracement resistance (and now the top of the weekly Ichimoku cloud) and trend-line support. January’s three consecutive red weekly candles, known as the “three white soldiers” candle pattern, have turned momentum bullish at last. Observed volatility has picked up, too, suggesting a break higher is imminent, helped by the bullish golden cross of the 50- and 200-day moving averages last week as well as the nine- and 26-week ones. A weekly close above 637 yuan (US$101) per tonne will probably lead to another surge of the size and speed we saw in late 2016 and early 2017. Our new target is now about 840 yuan.
Nicole Elliott is a technical analyst