Readers of Tech Charts blog will remember my earlier analysis on Copper.(https://techcharts.wordpress.com/2012/01/05/copper/) On the 5th of January Dr. Copper was the first commodity that signaled RISK ON environment for the first part of 2012. Copper was the first commodity that broke out of its consolidation range (symmetrical triangle) at 355 levels. It was after this breakout that we have seen strength in the energy sector and other commodities.
Dr. Copper after rallying from 355 levels to 390 levels, entered into a sideways consolidation and in the past one month it has been trading between 370 and 400. Our famous volatility indicator reached another low level. We are now looking forward for a breakout from the latest consolidation range. It is important to note that price has successfully held above the 200 day moving average over the past one month (bullish). In the short-term we are likely to see a breakout in either direction. We need to see a confirmation. No anticipation at this point. A breakout above 400 levels will push prices towards 450 and a break below 370 levels will result in a correction towards 350 levels.
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