As I suggested in my post Oct. 27 entitled ‘Another false dawn for doctor copper,’ the price of copper has once again retraced and arrived back at the VPOC denoted with the yellow dashed line on the daily chart, which is now also providing a technical rescue point for the red metal – both in terms of volume and price.
First, we have the VPOC itself. It is where we have price agreement to use a market profile term. This is a region at which we have the heaviest volume on the VPOC histogram. Hence, it is a point at which we can expect to see further congestion develop in the short term, as indeed we saw last week.
Second, and immediately below the VPOC, we have a very strong platform of price-based support delivered from the accumulation and distribution indicator for NinjaTrader. This is the red dashed line, which, in combination with the VPOC, presents an extremely significant band of support in the $4.35 lbs area. However, the interesting point for the medium term is how rapidly the volume on the VPOC histogram begins to fall away once the price breaks the $4.45 lbs area. As such, we may well see a repeat of the price action of October with a rally through this level with only minor price-based resistance ahead at $4.41 lbs.