The base metals complex witnessed a strong institutional buying frenzy. Copper has entered a period of parabolic growth, where the metal is trading at a large premium of 13,652. This move out of technical resistance is indicative of an institutionally-driven short squeeze as a result of ongoing physical shortages.
These price gains have been triggered by disruptions in the supply chain. The Strait of Hormuz issue has exacerbated energy issues, causing higher expenses at mines and refineries, thus lowering the production rate of copper. Additionally, there is a high level of demand due to essential industrial needs such as the growth of renewable energy initiatives, power grid upgrades, and artificial intelligence data centers. Demand currently exceeds mine production, meaning that physical stocks are highly sought after by corporations.
In terms of technical, reading through the signals on the chart indicates a healthy balance within the market conditions. This is indicated by the fact that the RSI is currently standing at 60.14, meaning that the asset is not exhausted in any way since there is still room for growth before going vertical. Additionally, the 20-day, 50-day, and 200-day EMAs are aligned well with each other. This is because the price line is moving with them without creating any vertical divergence, indicating sustainable trend accumulation.
Trade recommendation:
Direction: Long
Entry range: 13,350 – 13,550
Primary target: 14,250 (Psychological milestone and extension zone).
Secondary target: 14,800
Stop loss: 12,980
Parabolic continuation:
Daily close above 13,650 + High volume will lead to direct expansion toward 14,250 as structural shorts capitulate.
The mean-reversion dip:
RSI rejecting 80 and curling down under 70 will result in a sharp, volatile pullback to 13,100 to retest the 20-day EMA support anchor.
High-level consolidation:
Price flagging between 13,400 and 13,600 suggests sideways digestion to clear the overbought RSI before the next leg higher.
These price gains have been triggered by disruptions in the supply chain. The Strait of Hormuz issue has exacerbated energy issues, causing higher expenses at mines and refineries, thus lowering the production rate of copper. Additionally, there is a high level of demand due to essential industrial needs such as the growth of renewable energy initiatives, power grid upgrades, and artificial intelligence data centers. Demand currently exceeds mine production, meaning that physical stocks are highly sought after by corporations.
In terms of technical, reading through the signals on the chart indicates a healthy balance within the market conditions. This is indicated by the fact that the RSI is currently standing at 60.14, meaning that the asset is not exhausted in any way since there is still room for growth before going vertical. Additionally, the 20-day, 50-day, and 200-day EMAs are aligned well with each other. This is because the price line is moving with them without creating any vertical divergence, indicating sustainable trend accumulation.
Trade recommendation:
Direction: Long
Entry range: 13,350 – 13,550
Primary target: 14,250 (Psychological milestone and extension zone).
Secondary target: 14,800
Stop loss: 12,980
Parabolic continuation:
Daily close above 13,650 + High volume will lead to direct expansion toward 14,250 as structural shorts capitulate.
The mean-reversion dip:
RSI rejecting 80 and curling down under 70 will result in a sharp, volatile pullback to 13,100 to retest the 20-day EMA support anchor.
High-level consolidation:
Price flagging between 13,400 and 13,600 suggests sideways digestion to clear the overbought RSI before the next leg higher.
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Join PrimeXBT via the link below: go.appxbt.link/my6s/vf8j1cp5
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.