[Premium] Update On Base Metals

First up is Aluminum which broke out of a multi-year base last summer and met our price target near 153 in April. Prices have since been consolidating above that level and appear to be continuing higher, so as long as we're above 152.70 we want to be long and taking profits near 190.

Next on our list is Lead which has made several attempts over the last year and a half to clear resistance at 170, but has failed to do so. After consolidating at the upper end of its range, it appears to be making another attempt at moving higher. Given the strength in the rest of the space, we think a successful breakout is the higher probability outcome and therefore want to be long above 170 and taking profits near 192.

Nickel met our price target near 990 in April, consolidated for a month, and is now continuing higher. As long as prices are above 989.70 we want to be long and looking to take profits at the 2014 highs near 1,280.

Last but not least is Zinc, which has been consolidating since late last year and finally looks ready to join the party. We want to be buying a breakout above 218.50 and look to be taking profits near 248.

The Bottom Line: Copper is the latest component to break out of a major base, but all of the base metals currently have well-defined risk and asymmetric reward/risk on the long side. This trend has been intact for a while and there is little evidence that it's changing anytime soon, however, if it does we have our risk management levels to get us out with small losses.

Be sure to also check out the  Commodities and Currencies Chartbook for updates to the base metals thesis as it plays out, as well as our analysis of the other areas of the market.

Allstarcharts Team