Tag: copper analysis

Freeport-McMoRan Could Be In Trouble As Copper Approaches A Decision Point

Posted on by Aibek Burabayev

Aibek Burabayev - INO.com Contributor - Metals


The background for the copper market is not brighter these days as the macroeconomic data of the top metal consumer - China points at the cooling economy. Asian traders stored up the metal at the start of this year, pushing the price above the $2 mark to a high of $2.3. Nowadays weakening demand puts pressure on copper prices as the Chinese currency hit a 6-year low against the dollar which makes the import more expensive.

Chart 1 Copper Weekly: Support Is At The Gunpoint

Weekly Copper Chart
Chart courtesy of tradingview.com

Copper’s price has been descending within an orange expanding downtrend for the past two years. The Contracting Triangle pattern (highlighted in blue) reflects the sideways structure of the market this year. Continue reading "Freeport-McMoRan Could Be In Trouble As Copper Approaches A Decision Point" →

Copper Waits If Oil Keeps Upside; China Is In Focus

Posted on by Aibek Burabayev

Aibek Burabayev - INO.com Contributor - Metals


Chart 1. Crude Oil-Copper Correlation: Gap Widened

Crude Oil-Copper Correlation
Chart courtesy of tradingview.com

Another attempt by oil to close above the psychologically important $50 level (black dashed horizontal line) has failed. This was the third and a good try, and it was after a good correction in July, which makes bulls nervous as they lose their patience. Copper couldn’t keep the correlation gains achieved in July as it didn’t follow the rising crude last month and on the contrary, it moved the opposite way below the $2.2 level. The gap between them widened.

It’s not all bad news. There are at least two positive factors: Continue reading "Copper Waits If Oil Keeps Upside; China Is In Focus" →

Freeport-McMoRan Could Double Amid Strong Copper

Posted on by Aibek Burabayev

Aibek Burabayev - INO.com Contributor - Metals


Copper advanced 15 cents or 7% higher from my previous post and it looks like we are going to see much more strength as it was just a warming-up.

Chart 1. Copper-Oil Weekly: The Metal Tries To Catch Up Consolidating Crude

Chart 1. Copper-Oil Weekly: The Metal Tries To Catch Up Consolidating Crude
Chart courtesy of tradingview.com

The comparative chart above became a tradition. This time, there are no dramatic changes on it and the only drama here is the failure of crude oil to surpass the first strong barrier at the $50 mark (black dashed horizontal line). Oil has been stuck in a $5 range between $45 and $50 levels. We are at a crucial point as soon we will know for sure if it was a strong correction in oil before another huge drop to the $26 low or below or is it a consolidation before the break through $50 and then $60 barriers within a new uptrend. Continue reading "Freeport-McMoRan Could Double Amid Strong Copper" →

Copper Bites The Dust Behind Strong Oil

Posted on by Aibek Burabayev

Aibek Burabayev - INO.com Contributor - Metals


All of the top commodities have rebounded amid the dollar's weakness recently, but copper didn't follow the pack to make gains. I think we should take a chance as this misbehavior will not last for long.

Chart 1. Copper-Oil Correlation: Huge Divergence!

Copper-Oil Correlation
Chart courtesy of tradingview.com

The crude oil is very strong these days, although last time we have been witnessing its comparative weakness to copper. It looks like the Double Bottom reversal pattern is still making the game for oil with the first strong barrier at the $50 level.

This time, copper overreacted to the short-lived drop of crude hitting the $2.06 area, and this gap that we can see on the chart above kept at the following strong rebound. And then another weird thing happened – crude oil had a minor pullback and continued its upward move while copper overreacted again down to the previous low area at $2.06, this time with even larger divergence. Now look at the left part of the chart, the current gap reminds me the one-year-old situation – oil had stalled at the end of May 2015 while copper overcame it with a new high and then it dropped sharply to run down crude. Therefore, there is a high probability of copper catching up soon with the current oil price corresponding to $2.40-2.50 copper price levels.

Let's look at the copper chart below to find it out. Continue reading "Copper Bites The Dust Behind Strong Oil" →

Copper Update: Follow The Crude?

Posted on by Aibek Burabayev

Aibek Burabayev - INO.com Contributor - Metals


Old trading wisdom says, "The Trend is your friend." I hope that you also prefer trending markets as it is the clearest action of market unity. I was patiently waiting for the upside move in oil to exhaust itself and see a clear break of the trend with a daily close and the following open to be below that close. And it happened today. So let's think about the coming opportunities.

Chart 1: Copper-Crude Oil Correlation: Gap Closed

Chart of the Copper-Crude Oil Correlation
Chart courtesy of tradingview.com

Oil finally managed to close the gap with the copper thanks to a very sharp trend amid a flat move in copper. Although copper peaked earlier than oil, the former started down first, as usual. They began to diverge again as oil fell below the blue support line while copper bounced up from its Thursday low. We will see if oil is still an early indicator of the copper move and if will they both hit new bottoms.

I refreshed the daily charts below to show you the recent moves in detail. Continue reading "Copper Update: Follow The Crude?" →