more_reports

Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe

Is the Copper Correction Over?
Contributed Opinion

View Important Disclosures for this Article
Share on Stocktwits

Source:

Technical Analyst Clive Maund shares his thoughts on the current state of the copper market and where he believes it is headed.

With a massive long-term supply deficit bearing down on the copper market it is believed to be in a continuing bull market and this being so, the quite heavy correction from the mid-May highs is viewed as presenting an opportunity to buy copper itself or various copper stocks that have dropped back in sympathy with copper.

On the latest 6-month chart for copper, we can see that the reaction back from the mid-May peak has involved two big downlegs punctuated by a significant countertrend rally, so this correction looks like a 3-wave A-B-C correction.

The second downleg, which is still in force, has resulted in copper becoming quite deeply oversold on both its MACD and RSI indicators, and with the price now entering a zone of quite strong support close to its 200-day moving average, this looks like a good area for it to stabilize before turning higher.

Whilst buyers of copper and copper stocks here would be attempting to "catch a falling knife" inasmuch as it could drop further, the probability of it reversing to the upside soon is improving fast. The best tactic might be to wait until we see a reversal candle, such as a bull hammer or a "dragonfly doji," on the increased volume before buying. 

On the positive side, the recent drop in the price of copper will hopefully reduce the number of power outages caused by opportunistic thieves stealing copper transmission cables.


Want to be the first to know about interesting Base Metals and Critical Metals investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. Subscribe

Important Disclosures:

  1. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found  below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

  2. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

For additional disclosures, please click here.

Clivemaund.com Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be construed as a recommendation or solicitation to buy and sell securities.


Want to read more about Base Metals and Critical Metals investment ideas?
Get Our Streetwise Reports' Resources Report Newsletter Free and be the first to know!

A valid email address is required to subscribe