Comex High Grade Copper Price Futures (HG) Technical Analysis – $3.0230 Trigger Point for Steep Break
Profit-taking and overbought trading conditions helped December Comex High Grade Copper futures form a weekly closing price reversal top at $3.1785. The chart pattern doesn’t mean the trend is getting ready to turn down. However, it does indicate a shift in momentum to the downside that could encourage further profit-taking and a possible 2 to 3 week correction. This type of chart pattern often leads to a 50% to 61.8% correction of the last major rally.
Weekly Technical Analysis
The main trend is up according to the weekly chart. Last week’s closing price reversal top, however, indicates the selling may be greater than the buying at current price levels.
A trade through $3.1785 will negate the chart pattern and signal a resumption of the uptrend with the next major targets main tops at $3.2245 and $3.2415.
A trade through $3.0340 will confirm the chart pattern. This could lead to an almost immediate test of the major Fibonacci level at $3.0232. We could see a technical bounce on the first test of this level, but be prepared for an acceleration to the downside if it fails as support.
The main range is $2.5025 to $3.1785. If there is a normal correction, then its retracement zone at $2.8405 to $2.7605 will become the primary downside targets. Inside this retracement zone is a major 50% level at $2.8250.
The strongest 50% area on the charts is $2.8405 to $2.8250. Since the main trend is up, I expect to see buyers return on a test of this area.
Weekly Forecast
Based on Friday’s close and the closing price reversal chart pattern, the direction of the market today is likely to be determined by trader reaction to last week’s low at $3.0340.
Holding above this level will indicate the presence of buyers. If they come in strong enough then look for a potential rally back to a cluster of potential resistance levels. The first is the closing price reversal top at $3.1785. The next is a long-term downtrending angle at $3.1865.
The strongest resistance cluster comes in at $3.2225, $3.2245 and $3.2415.
Taking out $3.0340 will indicate the presence of sellers. If this generates enough downside pressure, then look for an acceleration to the downside if $3.0230 fails as support.
The weekly chart is wide open under $3.0230 with the next major targets coming in at $2.8625, $2.8405 and $2.8250.
This article was originally posted on FX Empire