– Copper has pulled back nearly 8% from the 2017 highs and is now testing its first key level of support near the 50-day moving average and August consolidation zone.
– The pullback resembles the December 2016 lows as price action hits the 50-dma as Full Stochastics reach extreme near-term oversold levels.
Global Copper Miners ETF: Trading Opportunity Off the 50-MDA
– The Global Copper Miners ETF (COPX) has pulled back to initial support at the 50-day moving average.
– The recent weakness has pushed Full Stochastics to oversold levels and reset daily RSI providing an opportunity to accumulate.
Freeport-McMoRan: Testing Key Support
– Freeport has pulled back to converging support at the 200-day moving average, August lows and neckline of the Feb-July rounded bottom.
– Combined with sub-10 Full Stochastic readings, the recent pullback provides an attractive entry point.
Glencore: Dual Support
– Glencore is retesting the breakout from the November to August trading range and rising 50-day moving average.
– The September pullback has reset momentum from an oversold condition and offers an opportunity to accumulate.
First Quantum Minerals: Bottom of Channel
– Price action has pulled back 17$ from the September highs and is now at the bottom of the developing bullish channel.
– Deeply oversold Full Stochastics combined with price testing support suggests adding to FM at current levels.
HudBay Minerals: Oversold at 200-Day Moving Average
– Attractive entry point in HBM as price tests a key inflection level dating back to December 2016 and the rising 200-day moving average.
– RSI, MACD and Full Stochastics reset and price action remains in an uptrend versus the TSX Composite.
Copper Commitment of Traders: Still Needs to Reset
– While we see attractive trading opportunities in Copper stocks after their recent declines, there still remains some risk over the coming months from the positioning in the Commitment of Traders.
– Net speculative long positions in Copper have risen to the second largest net long position in history behind only the late 2016/early 2017 period. At the same time, commercial traders have opened up significant net short positions approaching the 2017 lows.
– The bearish COT setup suggests Copper is likely to experience a multi-month period of consolidation similar to the first half of 2017.
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