Crowded Copper Trade At Risk Of Major Meltdown (JJC)

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March 9, 2018 6:13am NYSE:JJC

copper

Technical analyst Chris Kimble examines copper’s price chart and finds big downside risk ahead.


Doc Copper peaked in 2011 and has remained inside of falling channel (A) ever since. It hit the bottom of the channel in 2016 and a 2-year rally has been in play.

The rally now has Doc Copper testing the top of falling channel (A) and the apex of a bearish rising wedge as momentum has reached levels last seen at the highs in 2011.

If Doc Copper breaks support at (3), it could slip and fall!

Below looks at the position of traders in the copper market from Sentimentrader.com

Over the past 10-years when traders were positioned as they are currently at (1), Copper a few times was closer to a high than a low.

This crowded trade suggests that if Doc Copper would break support at (3) in the top chart, it could take a hard fall.

The iPath Bloomberg Copper Subindex Total Return Sub-Index ETN (JJC) was unchanged in premarket trading Friday. Year-to-date, JJC has declined -7.51%, versus a 2.71% rise in the benchmark S&P 500 index during the same period.

JJC currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #22 of 144 ETFs in the Commodity ETFs category.


This article is brought to you courtesy of Kimble Charting Solutions.


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