Copper Bears Taking Control
09 July 2009
2009 has seen a good recovery in High Grade Copper, following the serious losses of the previous year. Interesting resistance on the long term chart was recently reached, and we were on the lookout for a pullback phase – it’s underway now.
WEEKLY CHART – CONTINUATION:
Recovery from the 1.2475 Dec-08 low recently encountered dual resistance from the 2.3850 2007 low and 38.2% recovery level.
A pullback from here is not a surprise.
The structure of the 2009 recovery had looked mature to us too.
DAILY CHART – Sep-09::
Note that earlier support from the small bull channel base was broken on a closing basis on Wed – this follows effective resistance from the small 76.4% bounce level at 2.3830.
Bears initially target the 2.0170 38.2% pullback area. In the event of a deeper correction we are inclined to focus on the 1.7415 61.8% area next.
We regard weakness as temporary for now.
In Monday’s Commodity Trading Guide we suggested aggressive sales (entry assumed within 2.26/31 area), initial stops at 2.4000. We target towards 2.0200 for partial profits, then lowering stops to at least cost.
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