BLBG:Copper Triangle Break Means Further 10% Drop: Technical Analysis
Copper futures, down 16 percent this year, may fall by next month to the lowest since mid-2010, based on technical analysis by Matt Zeman at Kingsview Financial LLC.
The attached chart of monthly prices shows that copper on the Comex in New York broke out of a triangle pattern formed by a high in February 2011 of $4.6575 a pound and a low of $2.994 in October that year. Declines beneath the lower line of the triangle in the past three months signal a 10 percent drop to $2.75 by early August, Zeman said in a telephone interview.
“The charts look bearish,” said Zeman, a strategist at Kingsview in Chicago. “The inability to maintain any meaningful rally is also a bearish factor. We could see a pretty quick slide lower.”
Copper has dropped this year amid signs of a slowing economy in China, the world’s biggest consumer of the metal, and concern that Federal Reserve policy makers will reduce stimulus in the U.S. The metal hasn’t traded as low as $2.75 since June 2010.
In technical analysis, investors and analysts of trading patterns and prices to predict changes in commodity, currency or index.
To contact the reporter on this story: Joe Richter in New York at jrichter1@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
