Is Your Copper Turning Green?

July 15, 2014 4:52 AM

Around where I live people use a lot of copper in their house. Not just the pipes but on the outside. Gutters and downspouts. Roof seems and peaks. Cupolas, bay windows and weather vanes. It is easy to see who has remodeled one of the 100 year old houses because the copper is still shiny. It will only take a couple of years though until that shine fades to a mature verdigris that the owner is looking for.

It has taken a bit longer than that for the Copper market to look like it might turn green. Green as in making money for long holders that is. The chart below shows that Copper has been in a stair step lower for 3 years.Is this about to change? Perhaps, take a look.

Since March Copper has been moving higher and is now retesting the mid line of the ascending triangle that it broke down from.  This could certainly stall the price action but there are signals that support more upside out of the bull flag after consolidation.  The RSI is bullish and the MACD rising.  The shorter SMA’s are crossing up through the longer ones, with a Golden cross (50 SMA crossing up through the 200 SMA) only a few days away.  The chart of the Copper ETF below shows another signal.  The price action since February has created a Butterfly harmonic.  The target for a possible reversal on this pattern happens to be at 41.50, or 3.44 on the futures chart.  Both would be above the price range experienced since May 2013.  Copper may have bottomed.

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