Copper Analysis July 2015 (D,M)
Created on Sunday, 28 June 2015 00:26
Written by Austin Galt
Copper was last analysed in March 2015 in which we were expecting a pullback before a further rally. Price is currently in pullback mode but I expect it is about to revert to rally mode again. Let’s update the situation using the daily and monthly charts.
COPPER DAILY CHART
We can see price has dropped steeply over the past couple of months. I previously forecast price pulling back to below $2.50 and it looks like that is about to eventuate.
I have added Fibonacci retracement levels of the recent move up and I am targeting a low to occur between the 76.4% level at $2.55 and the 88.6% level at $2.42.
I have drawn a Fibonacci Fan and I am looking for price to find support around the 88.6% angle.
The PSAR indicator now has a bullish bias so price will have to crack that support if it is to make a new low. The dots currently stand at $2.57 but I expect that support to succumb.
A new pullback low would likely set up a triple bullish divergence in the RSI which generally leads to a significant rise.
The MACD indicator has already turned bullish in what may be a sign of things to come.
COPPER MONTHLY CHART
The RSI showed a new low recently which is generally bearish as final lows are often accompanied by bullish divergences which requires a higher RSI low reading.
The PSAR indicator has a bullish bias wit the dots underneath price. Price now looks headed down to test this support which I expect to hold. The dots are currently at $2.44 and will be around $2.45 in July.
There looks to be an ABC corrective pattern in play with price currently tracing out the B wave. We have identified where that wave B low is likely to be in the daily analysis. Once in place a move up to form the wave C high should commence.
Where is the wave C high likely to be?
I have drawn an Andrew’s Pitchfork which was also shown in previous analysis. The expectation was and remains for the final rally high to be at resistance from the upper channel line. This looks set to be around $3.10 in September 2015 which sounds about right.
Also, I have drawn a horizontal line which represents the previous swing lows set in October 2011 and June 2013 and formed a double bottom at $2.99. This level should act as resistance but I favour price pushing above this level as it gives this resistance a good test.
Once the wave C rally high is in place I expect price to get smashed as laid out in previous analysis.