Shortly after retracing from a one-year high of $2.733 per pound, copper is recovering after finding support at $2.43. While trading volume is expected to be weak with the Thanksgiving holiday, copper investors should be mindful of support and resistance points to determine if copper is again picking up momentum for a retest of $2.733.
If not, and prior support fails at $2.43, the metal could slip to previous support at $2.10. In the event copper rallies from here, we can look for it to retest $2.59. Should it take out that high, we could be looking at a retest of May 2016 resistance at $2.956.
The metal is up about 18% since October… soaring 9% just over the last week. That’s a rare move that’s only shown itself maybe 17 times since 2000. And, if we look back over the last 16 years, 15 out of the 17 times, copper typically runs even higher after such spike, sometimes by as much as 41%.
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In short, copper is long overdue for a pop here again, thanks in part to expectations for a pick up in global manufacturing and infrastructure spending in the U.S.
“Speculators are piling into the long side of the market,” said Phil Streible, a senior market strategist at RJO Futures, as quoted by Bloomberg. “There’s speculation as far as how infrastructure will play out in the new presidential role. It will get the aggressive buying coming back in. Copper may resume its rally up to the most recent high.”