Copper is one of the metals that went up 10x during the commodity boom almost two decades ago now. Although copper has not confirmed a breakout as of yet, it is working on a bullish reversal right above 2011 highs. We did not include a forecast for copper (we cover gold and silver), we might publish one in the not too distant future. However, simply by looking at the daily and monthly charts of copper we can find the bullish vs. bearish scenario conditions.
In terms of fundamentals we understand that copper is increasingly playing a role in the green battery metals space. We did explain this in our Green Battery Metals Forecast for 2022.
Copper has a really bullish setup here.
The trick is to combine the long term and medium term timeframes.
Medium term, the daily timeframe, shows a bullish W reversal. Whether it will hold is another question, but if 4.42 is respected we could expect the start of a bigger move.
Any move below 4 USD, the lower of the two red trendlines, would invalidate the bullish setup.
We have to look at the longest timeframe: the monthly.
The monthly copper chart over 23 years puts things in perspective. It shows what type of ‘big move’ might be developing. Copper may have risen from 2.2 to 4.4 in the last 2 years, pretty significant. In the bigger scheme of things, though, it is nothing compared to what copper is capable of doing. If you look at 2004 and 2005 you can see the 8x move in 2 years, right.
Copper is now setting a bullish reversal (above chart, daily) right at a secular level (monthly, below).
In our Momentum Investing service we will include our favorite copper miners in our shortlist, somewhere next week. The shortlist is a list of stocks that we track until we get a buy signal from our algorithm.