Know Your Timeframe: Base Metals Edition
Here's Copper priced in Rupees, getting close to our upside objective near 540 and quickly reversing as momentum diverges negatively. This, combined with prices being extended from their 200-day moving average after a sharp rally since March suggests a pause in the near-term is likely.
Click on chart to enlarge view.
We're seeing similar conditions in Nickel, another leading Base Metal, which is reaching our second price objective at the 61.8% Fibonacci Retracement of its August-March decline as momentum diverges. With a flat 200-day signaling a lack of long-term trend, some consolidation here before its next leg higher seems logical.
With all that said, it's important to remember what timeframe is relevant to you. Copper just broke out of a 10-year base, so any weakness back towards 465 would likely represent a buying opportunity for those with an intermediate to long-term timeframe who missed the initial move or have been waiting for an opportunity to increase their exposure.
In the meantime, there remain plenty of other opportunities in the Commodity space as Metals take a rest. Here's Jeera printing a weekly close above former support at 14,200, which was the signal we were looking for. Some upside follow-through this week would add to our conviction that this is a successful breakout and that much higher prices are ahead.
To conclude, prices in Copper and other Base Metals look ripe for some consolidation in the near-term. With that said, any weakness would likely present a buying opportunity given the intermediate/long-term trends in the space are still higher.
In the meantime, we're getting involved in Jeera and other Commodities that are just starting to move out of their bases.
And in the event we're wrong and Base Metals continue their upward trend, then the targets we just met become our new risk management level and we look towards the next upside objectives outlined in our charts.
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Thanks for reading and please let us know if you have any questions!
Allstarcharts Team