[Premium] Base Metals Update

The base metal space has been a bit of a mess after a failed breakout in Copper in June put the brakes on the entire space. With that said, Copper has confirmed a failed breakdown by breaking through supporting and quickly reversing as momentum diverged positively. Given the improving price action in the rest of the group, we think this can be the catalyst for prices to finally break out above 475 and spark a rally toward 590.

Click on chart to enlarge view.

Nickel broke out at the start of the year and then got a bit ahead of itself, trading above our initial target of 990 and then failing to hold above it. Prices have since consolidated through time as momentum stayed out of oversold conditions. The failed breakdown that's formed over the last couple weeks and confirmed on Friday should be the catalyst for a breakout above 990 that would target 1,280.

The third and final chart is of Aluminum, which much like Nickel got a bit ahead of itself and has been consolidating below resistance since. Prices are now trading in a tight range below resistance at 153, so we want to be buying that breakout for a move toward 190.

The Bottom Line: We've seen rotation throughout the Commodities space all year, allowing us to participate as trends emerge and allocate our capital to more efficient assets when there's little edge. Price action over the last month or so seems to be suggesting an improving environment for Base Metals, so we want to be watching for the breakouts noted above and capitalizing on them if/when they confirm.

Thanks for reading and let us know if you have any questions!

Allstarcharts Team