TV

Ole Hansen
Brent Oil is used as the benchmark for more than half of all global transactions but only a bit more than one percent originates from the four production sites which make up the benchmark.
Article / 19 February 2013 at 11:00 GMT

Copper close to breaking out of rising Wedge

Kim Cramer Larsson Kim Cramer Larsson
Technical Analyst / Saxo Bank
Denmark

Copper has formed a rising Wedge pattern and is currently testing the lower trend line - and it looks as if it’s breaking out downwards. It does get a bit of support from the 55 daily moving average.
A bearish break out occurs almost 70 percent of the time and this could be now, but it needs to close outside of the pattern to be confirmed.

Copper daily - wedge


The target would be the lowest valley in the Wedge, which is at about 340.30. However, the 200 moving average and the 61.8 retracement of the bullish move since November 2012 offers some support.
According to the more conservative measure rule (calculated by Thomas Bulkowski) of a rising Wedge, the target would be about 349, which is also at the 76.4 retracement.
That is also about that level the 200 weekly moving average is at.
If going short at the present level, the correct stop would be the peak at about 377.55. I would, however, choose to stop out if copper jumps back above today’s high at about 374.60. I have indicated on the chart a likely scenario if it closes below the lower trend line. A pullback to test the trend line after break out is common before the next (bigger) bearish move.

Indicators
RSI is not showing any divergence, but the bullish trend was broken a few days ago and RSI is set to test the 40 threshold. MACD has turned to bearish momentum.

Copper weekly

On a weekly chart, RSI was rejected at the 60 threshold but will probably still stay above 40 despite the likely bearish short-term scenario. But because RSI was above 60 in September and has not been below 40 for the long term, sentiment is still bullish. 

Disclaimer

The Saxo Bank Group provides an execution-only service and all information provided on Tradingfloor.com is solely for general information. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. Saxo Bank Group will not be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available as part of the Tradingfloor.com or as a result of the use of the Tradingfloor.com. Any information which could be construed as investment research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such should be considered as a marketing communication. Furthermore it is not subject to any prohibition on dealing ahead of the dissemination of investment research. Please read our disclaimers:
- Notification on Non-Independent Investment Research
- Full disclaimer

Show latest activity
Dismiss
Sorry, there was a problem communicating with the TradingFloor.com servers. We are working hard to solve this. Please try again later.
Oops! There was a problem communicating with the OpenAPI Portfolio service.
Oops! There was a problem communicating with the OpenAPI History service.
Oops! There was a problem communicating with the OpenAPI Reference service.
Oops! There was a problem communicating with the OpenAPI Root service.
Oops! There was a problem communicating with the OpenAPI Trading service.
Sorry, there was a problem communicating with the Financial Calender servers. We are working hard to solve this. Please try again later.
Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail