Most of the time it is a level on the daily chart that stops and reverses a market’s direction. However, when you couple good technical levels with solid fundamental news, you will see a sharp reversal like we are getting today in December copper futures.
First of all, the copper market has been basing a bottom around $2.0800 level after a fairly sharp selloff from the $2.2000 level. Copper, like the majority of other commodity markets, has been range-bound since mid-year. Now, we are seeing supportive fundamentals as LME copper stocks have been on the decline for the past few months and a renewed hope that Chinese demand will return to the market.
Sharp sell-offs are typically followed by sharp technical rebounds in the markets. December copper futures will run into some resistance around the $2.1500 to $2.1600 range, and will need a close above $2.1585 to encourage additional buying to drive further rallies back to the $2.2000 range.
If you are interested in trading commodity futures, please call me to discuss our services.
Series 3 Licensed
Frank J. Cholly
Senior Market Strategist
Frank brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.