The last half of the year 2017 was a great one for Copper. Rising from a base, this base metal ran higher for for 4 months to a top in late August. A couple of pullbacks and reversals higher later and it was at a 4 year high near year end. But then the useful metal stalled. It moved sideways in a range for nearly a year. The range tightened in the spring and then a final surge to the upside saw a retest of the December high. It failed and fell back.
But as the chart below shows, this time the bottom of the range did not hold. Copper prices continued to move lower into July. The price bottomed last week after retracing nearly 78.6% of the move higher. Since then it has been bouncing. The bounce is now approaching that prior support level that held it for the past 11 months. Will it act as resistance this time?
Early indications suggest yes. The price has initially stalled at the retest of the break down. This happens often after a breakdown, a bounce to retest then continuation, in this case lower. The Bollinger Bands® are pointing down in a sharply descending channel. The RSI, a momentum measure, is stalling prior to giving a bullish reading. Only the MACD, crossed up and rising, looks promising. But that is correcting from a deeply oversold move. This could all change next week, but the onus is on copper to prove its strength by pushing through resistance. Right now that prospect looks dim.
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