December Copper, is the rally over?

November 9, 2016 2:08PM CST

Copper has been on a tear with 13 straight days of gains, the most since 1988 and making fresh two year highs overnight. It’s no surprise that Chinese demand has had much to do with this run up. The one thing to consider is that with this election, Trump has promised to invest heavily in American infrastructure which would be directly tied to copper demand and could paint a longer term increased demand picture for the market. Recently, the Chinese trade balance numbers have been soft at best. The market might be propping up the trade with the fact that LME stocks have been declining, and world demand could be considered more in play than China at this point. The market seems to be discounting the Chinese and looking for fresh news out there. The trend continues to be up longer term, however, I view this as an unsustainable rally and see a slight pullback to relieve market pressure. Right now December Copper is trading at 2.46. Looking at it from a technical perspective copper needs a correction to the 2.30 area before taking off. I can see a correction taking place even if only slight, in the next few days. I am recommending shorting 1 Dec Copper anywhere from 2.40-2.45, with an objective of 2.30. A total profit of $2,500. This represents a 10 cent move to the downside with every penny moved representing $250. For more information on trade opportunities in the metals markets contact me at 312-373-5383. 

 

Copper Daily

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