Copper has been range-trading for most of 2017 and a compression formed 4 days ago, as is usual after a period of sideways price action. Compressions usually mean a new trend is about to start and indeed copper prices dropped sharply away from the compression yesterday. This drop was too fast to catch, as we always prefer to see a closing break before taking action and the price closed on its low, 6 cents down which is about 2.5% of the price – too scary to sell comfortably.
Today it has rallied a bit and this offers a chance to ‘sell the bounce’. There is some chance that the rally will continue a little more but there will be resistance all the way up into the compressed area, which extends from 2.6040 to 2.6710. The last compression provided resistance to three subsequent rallies, as the chart shows, so it may be better to be a bit patient here.
All signals generated by software supplied by our friends at Parallax Financial Research www.pfr.com
