The iPath Dow Jones-UBS Copper ETN (JJC) rallied more than 6% on Friday after the better-than-expected jobs report for April. The beaten-down commodity could be set up for an extended bounce since so many traders are bearish on copper.
“Base metals are seeing a wave of short covering here on the back of non-farm payrolls — copper is leading the way,” a metals trader told Reuters.
The copper exchange traded note has rallied the past two days after falling to its lowest level in nearly three years. [Copper ETF Drops to Lowest Since June 2010]
Copper prices on Friday were on track for their biggest daily gain in almost 18 months, according to Reuters.
Kimble Charting Solutions points out a bullish technical situation in copper that could lead to a sustained rally. The commodity fell to a key support line just as sentiment on copper collapsed to levels last seen at the 2009 financial crisis lows.
iPath Dow Jones-UBS Copper ETN