Chart of the day: Lead takes it slow and gentle

The four sharp weekly falls following China’s National Day holiday were not what we had expected. Subsequent price action is seen as a slow, gentle rounded base, which formed just ahead of Fibonacci 61 per cent retracement support and the top of the weekly Ichimoku cloud. Though moving averages are bearish, the lagging line has rallied from the top of the cloud 26 weeks ago. A sustained break above the 38 per cent retracement level at 19,454 yuan (US$2,940) per tonne completes an interim base and should see bullish momentum increase. It will also put prices clearly back inside the upper half of the large symmetrical triangle of the past 12 months. Expect a rally to roughly 21,650 yuan.

Nicole Elliott is a technical analyst