Short Term Reversal in Copper?

October 25, 2016 10:52AM CDT

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.

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Copper 240 min

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