I haven’t written about copper in a longtime. I was reviewing the chart this morning again and I thought to share it. Copper is by far one of the best indicators of the strength of the global economy. It is used in many things, plumbing, AC, vehicle radiators, electronic goods.
With the rise in infrastructure spending in US and China, copper demand is only going to grow. The growth of manufacturing will also affect the demand for copper. Also, if there is a slowdown in the world economy copper will likely give you an early indication of that. For now, the trend is intact on the upside. Any correction will be a buying opportunity rather than selling. Near-term, the chart provides an opportunity for a breakout type of traders on a close above $3.20 as well, value could wait for a correction near $2.80. Unfortunately, an option play is not ideal in the copper market.
All in all, the copper market seems to have found support around $3.00, naturally, the trade would find anything below a $3.00 value. I don’t recommend trading copper options; however, I do like trading spreads in general. Please contact me for a trading strategy that would be suitable for your risk tolerance.
Copper Weekly Chart