Copper Could Face Strong Headwinds From China and Australia

Aibek Burabayev - INO.com Contributor - Metals


Copper topped the ranks at the end of last year and moved north to the middle of February without breaking any serious resistance peaking at $2.8230. Then the price drifted lower, closer to the area of the December 2016 low at $2.4480 as projected in my previous update. Copper has now bounced higher and I would like to share with you some new data, which could change my outlook for the metal.

I would like to start from Chinese data as they are the top importer of the metal in the world. China’s copper import dropped almost 20% in 1Q of 2017 according to the Chinese customs statistics and this is not supporting the pricing information. Below are two charts to show you more headwinds from China.

Chart 1. Copper Vs Chinese GDP Growth Rate (Quarterly)

Chinese GDP vs. Copper
Chart courtesy of tradingeconomics.com

The Chinese economy (left scale, blue) advanced only 1.3 percent in the 1Q of 2017, following a 1.7 percent growth in the previous three months and missing market estimates of a 1.6 percent growth. It has been the weakest expansion since the 1st quarter of 2016. GDP Growth Rate in China averaged 1.84 percent from 2010 until 2017. Continue reading "Copper Could Face Strong Headwinds From China and Australia"

Freeport-McMoRan's Consolidation Reached Trend Support

Aibek Burabayev - INO.com Contributor - Metals


Last month in my post I warned you that the market for copper and Freeport-McMoRan Inc. (NYSE:FCX) entered the consolidation period, which meant that it was good to let the market drift lower and wait for better price opportunities. As you could see in the chart below patience indeed is a key to everything.

Chart 1. Freeport-McMoRan Weekly: Trendline Support

FCX
Chart courtesy of tradingview.com

The price lost almost a quarter for the past six weeks and touched the black trendline support, which stopped the drop and keeps the price above it for the third week already. The stock price already retraced to common the Fibonacci 61.8% level, which adds power to the black trendline support. Continue reading "Freeport-McMoRan's Consolidation Reached Trend Support"

Copper's Consolidation Offers Buying Opportunity for Freeport-McMoRan

Aibek Burabayev - INO.com Contributor - Metals


Every great party is followed by a hangover; every good rally is followed by a consolidation.

Chart 1. Copper Weekly: Consolidation

Weekly Copper Chart
Chart courtesy of tradingview.com

Copper was a hit at the end of last year. The price has gained more than 30% at the top of $2.74 from the end of last October. And then the players started to book the profit pushing the price down to the $2.4 area. It’s wise and natural to save such an incredible gain. Continue reading "Copper's Consolidation Offers Buying Opportunity for Freeport-McMoRan"

Freeport-McMoRan Could Be In Trouble As Copper Approaches A Decision Point

Aibek Burabayev - INO.com Contributor - Metals


The background for the copper market is not brighter these days as the macroeconomic data of the top metal consumer - China points at the cooling economy. Asian traders stored up the metal at the start of this year, pushing the price above the $2 mark to a high of $2.3. Nowadays weakening demand puts pressure on copper prices as the Chinese currency hit a 6-year low against the dollar which makes the import more expensive.

Chart 1 Copper Weekly: Support Is At The Gunpoint

Weekly Copper Chart
Chart courtesy of tradingview.com

Copper’s price has been descending within an orange expanding downtrend for the past two years. The Contracting Triangle pattern (highlighted in blue) reflects the sideways structure of the market this year. Continue reading "Freeport-McMoRan Could Be In Trouble As Copper Approaches A Decision Point"

Short Copper, Pray For Gold, Watch Ratio

Aibek Burabayev - INO.com Contributor - Metals


Dear INO.com Readers,

Today, I'm reviewing three metals based on short-term analysis.

Copper Is A Good Sell

Daily Copper Candlestick Chart

In my January post, I recommended selling copper above $2.75 and I hope you enjoyed a nice profit. For those of you who didn’t take that chance, below is my new one for you.

In December, copper entered a small steeper downtrend (highlighted in red) as the falling price accelerated. After breaking below the descending triangle’s base at $3.02 on the monthly charts, this red metal hit a multi-year low at $2.42, unseen from 2009, losing an impressive 20% in just 2 months. The price met the downside of the channel and quickly bounced off for a $0.20 gain and I will show why you should consider it a dead cat bounce. Continue reading "Short Copper, Pray For Gold, Watch Ratio"