Increasing selling pressure and declining momentum is a hurdle on Copper’s Uptrend. Prices rallied from 360 – 460 (based MCX Copper mini price value) in a span of 4 months. Technically it’s an intermediate uptrend from the perspective of Dow Theory.
The trend is still intact in Copper prices, which began after the breakout in mid July 2017. Rally in copper prices are justified by global growth and lower supplies. Investors’ perception and sentiment changed in June – July after repeated disappointments in supply mines. Synchronous global growth and depreciating dollar value at that time further increased the demand for copper. Market prices experienced lackluster rally from 360 – 450.
After touching 450, Copper prices experienced a drastic selloff till 410. But eventually recouped its earlier loses in consecutive trading sessions. Coincidentally, momentum started to decline from that period, oscillators and momentum indicators showed divergence from Price action. Technically it means selling pressure is increasing.
Currently we can spot a PB formation in Copper though it’s a trend continuation pattern, traders must exercise caution in trading the trend, as momentum is declining. Would the trend continues to make further highs? Watch the Price action and trade accordingly. Commodity traders should keep copper in their watch list, for coming days we can expect good opportunities.
