In a nutshell, short term buoyancy as another top is established; intermediate and long term back down, probably as the global economic slowdown increases.
Copper Daily Chart:
Copper has rebounded greatly over the last week. The H&S shown by the blue lines remains in play with downside target zone of 360-380. The trend of lower lows and lower highs remains in place from the February top; price will need to get above 450 to nullify this downward trend channel. The 20 MA crossing down thru the 50 MA in March was a signal of trouble ahead, watch for this again moving forward. The green circle shows how the 200 MA supported price during the recent weak trend. The 200 MA is sloping up which indicates that you must give the bulls the benefit of the doubt. A sideways symmetrical triangle played out in May-June, where price exploded up and out. The vertical base line of the triangle is about 35 points, so the breakout from 410 yields 410+35=445 target. That is where price sits now.
The action over the last month, from high to high, comes with all the indicators sloping up, a long and strong profile, thus, price will want to make another matching or higher high after a pull back occurs. 450 is the obvious key level during the coming days.
Copper Weekly Chart:
The weekly chart shows the intermediate term for Dr. Copper. Note the April 2010 top, June 2010 bottom, February 2011 top; the doctor is always out in front leading the broad markets. The red cirlces show the importance of the 20 MA and 50 MA cross; in June 2009 the cross signaled an all clear for the bulls and the upside move was the place to be; in September 2010, the cross was stopped by Chairman Bernanke's QE2 plan that bounced the markets. The equities markets were going over the falls last summer but the 20 MA rebounded again telegraphing more market upside. During the market weakness last summer, the 200 week MA started to flatten out, but this recovered as well.
The RSI and MACD values from early 2010 to late 2010-early 2011 (purple circles) shows how these two indicators wanted to see another matching high at some point in the future. Looks like that point is now as price comes back up. Just like the daily chart, note how the price move higher over the last month is met with all indicators showing a long and strong profile, thus, after a pull back, price will want to come back up again for a matching or higher high. The 450 level is key.
The chart is not impressive from an intermediate to long term perspective--the opposite of what many talking heads are saying now as they now universally squawk for 500 copper. Do not hold your breath, especially with a global slowdown coming. Price will move sideways as it sorts out this next topping area in this 445-465 area, perhaps towards Labor Day. After this top side plays out, copper weakness should resume as the fall months approach with copper testing 400 again, and failing.
For copper charts use search box above for keystone speculator or view at stockcharts public charts list keystone speculator.