After the malaise of the last few months, copper finally nailed a key technical level firmly into place on Friday as the red metal surged higher, closing the session with a wide spread up candle supported with excellent volume, thereby confirming the validity of the move higher. Indeed last week’s price action was a very a positive one with every day building further bullish momentum on the previous day’s price action before culminating in the break higher on Friday.
Prior to last week, copper prices had wallowed in a narrow range, building a sustained area of price congestion centred on the volume point of control in the $2.07 lb region with resistance building firmly in the $2.15 lb region, a level that was finally breached on Wednesday and duly confirmed on Friday with the metal closing the week and session at $2.27 lb, its highest level since November 2015.
Whilst the longer term bearish trend remains dominant, the bullish trend on the daily chart now looks set to continue further, built on a solid platform of support that is now in place below. Ahead lie two high volume nodes on the volume point of control indicator, which may bring a temporary pause to any further short term advance, but should these be breached in the $2.35 lb region, then we copper prices could climb further and test the September 2015 highs of $2.49 lb in due course.
By Anna Coulling
Charts by NinjaTrader and indicators from Quantum Trading