Technical analyst Chris Kimble examines copper’s price chart and finds a potential topping pattern taking hold.
Doc Copper has spent the majority of the past 7-years inside of falling channel (1). It has done very well the past 3-years, as it has rallied over 70% since hitting channel support in 2015. The 3-year trend is up and nothing of late has changed the intermediate trend.
This strong rally now has it testing the top of falling channel at (2), where a couple of potential resistance lines could be in play. The strong 3-year rally has pushed momentum up to levels last seen at the highs in 2011 at (3) and it looks to be rolling over.
The inset box in the lower right highlights that a potential “topping pattern” could be forming in Doc Copper over the past 7-months.
If this is a topping pattern, it is important for Doc Copper bulls that support holds, highlighted in the inset box.
The iPath Bloomberg Copper Subindex Total Return Sub-Index ETN (JJC) was unchanged in premarket trading Friday. Year-to-date, JJC has declined -7.94%, versus a -0.35% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.