copper outlook

[prudhvi83]

Hi All

I am a new member and this is my first post.i was relatively a beginner in commodities.can anyone suggest me whats the outlook for copper in coming days.Will it reach 160 levels?....plz suggest me if its ok to short copper from 200 levels?,....

Thanks

Prudhvi

 

[prakashreddy]

I am not in the business of forecasting. My advice would be to trade along with the trend. For your convenience I am hosting three images of copper charts namelt, monthly chart, weekly chart and daily chart. See the monthly chart

In the monthly chart, you will notice that copper has made double top around 380 levels and has broken down the supoprt level around 250 quite convincingly. Present trend in monthly chart is undisputedly down. So larger timeframe is showing down trend

Image is not uploading. I have given the link to imageshack itself. See the chart from there.
http://img114.imageshack.us/my.php?image=coppermonthlyth2.png

 

[prakashreddy]

Now the weekly chart. Here is the link to the image

http://img117.imageshack.us/my.php?image=copperweeklyis1.png

You will notice that I have inserted two down arrows in the weekly chart. Notice how the present down move is much more severe than the last down move indicated by arrow. I mean the present downmove has covered much more distance than the last downmove indicated with the arrow that too in very short period of time. Weekly charts appear to be oversold. QUite a verticle fall. This indicates that there is absolutely no interest on the buy side. But since it has fallen so severely, that too without any meaningful retracement (to the upside), now you must be prepared for such a retracement. Eventhough monthly chart shows downtrend, weekly chart shows verticle fall and severe oversold condition. Not an ideal condition for shorting at this moment. You can short when the intermediate pull back rally nears to completion.

 

[prakashreddy]

You will also notice that the verticle downfall (in weekly chart) is not accompanied by volume. But in case of retracement, how far can it go? What are the likely areas where that retracement rally may find resistance? That I have indicated in the chart. Somewhere in between 240 and 250. You will observe price-volume movement closely in that area. For what? To short on the hint of weakness.

 

[prakashreddy]

Now the short term daily chart. Here is the image

 

[prakashreddy]

Aha! Now I know why images were not being hosted to the forum. I was not copy pasting the forum link, but the links provided to the friends. Mistake was from my side

 

[prakashreddy]

In the daily chart you will notice that breaking of the support level around 300 level has lead to severe fall. I have drawn a trendline (resistance line) for your quick reference. As it is, you will notice that the present downswing is not yet complete. It has to complete, then it has to break the trendline. Whether there will be selling climax or not, whether the price move sideways before making an attempt to find a direction, etc. can be decided only as and when the chart develops. As it is, it is too late to short and too early to go long.

 

[prakashreddy]

To sumup,

1. Monthly chart says down. Larger time frame down.

2. Weekly chart also says down but severely oversold. Too late to short, too early to go long. Medium timeframe says, opportunities are around the corner, firstly to go long for a counter trend trade and then to close long and to go short simultaneously.

3. Daily chart also speaks the same language of weekly chart. Shorter timeframe is also inconclusive. As it is down but too late to short and too early to go long. But your first opportunity to go long will be found in daily chart rather than weekly chart.

4. There is no point in trading without having stoplosses in place. Whatever may be the analysis, market may surprise anyone. So while taking any position, please have stoplosses.

I hope this helps

 

[jajati]

Fundamentally copper looks bearish. Demand is not coming from major consuming countries such as usa & china. credit crisis is still there in the market. Industrial activites have been slowed down. unless & until this financial market stable u can not see upside rally in copper. strategy should be sell on rise with protective stoploss of 227 target of 180-175.beacause 227 is the major resistance.

 

[goyaltraderz]

hope i will be able to get it right at this time only one indicator is not align with this chart, other wise it may be good buy for 2mr on pullback

if it break the redline (downside) decisively then we will have to rethink about our strategy. coz the it will be break of the wedge that should be with thrust. but right now this is showing the strength