Zinc is breaking out from a five month bearish channel and two month double bottom
Zinc Positioned to Move Higher After Successful Retest of Support: TV, TK
Chart 1 – Zinc has printed a bullish reversal off converging support levels along the 2014/2015 highs and retest of a seven year downtrend. The recent weakness was a healthy correction to work off the overbought pressure built up from the ~100% advance in 2016. Now weekly momentum has reset with Full Stochastics curling higher from oversold levels, confirming the price reversal off converging support levels. Zinc remains the strongest commodity within the CRB Index as price action carves out a multi-year uptrend and once again breaks out on a relative basis. Conservative long term upside measures to $3,500/t ($1.59/lb).
Chart 2 – Near-term, Zinc is breaking out from a five month bearish channel and two month double bottom. The breakout confirms the bullish divergence in momentum indicators and positions price action for a rally back to the 2017 highs. Look for any near-term checkback to find support at ~$2,650.
Chart 3 – Trevali was unable to break above resistance at the 2014 highs on its first attempt as momentum was already trending at overbought levels. Price action has subsequently pulled back in a retest of converging support levels along the uptrend from the 2015 lows and previous multi-year downtrend. With momentum now reset as price action tests support, the risk reward setup is very favourable.
Chart 4 – Tinka Resources has also pulled back to an attractive level along the rising 100-day moving average and 1/3rd retracement of the 2016-2017 advance. Momentum indicators have largely reset, providing a favourable risk/reward entry level.
Zinc: Bullish Reversal Off Support
Zinc: Breakout from Bearish Channel
Trevali Resources Corp.:
Tinka Resources Ltd.:
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