Cooper is leading the risk-on reversal upside momentum
From the beginning of the Year, copper is leading the metals recovery and is indicating the stock markets upside reversal potential. At the moment the instrument is testing a strong long-term upside resistance which will invalidate the possible H&S formation. This is mostly visible on the monthly chart below. You can see that the instrument is bouncing from strong upside support and an uptrend Pitchfork channel line 250 level.
A strong upside reversal, with the high possibility of the extension higher, is visible on the weekly chart. Eight weeks of the higher lows are indicating a strong upside momentum. The only resistance left is the long-term monthly identified 296 level which is also close to 100 SMA 299 level. Weekly 100 SMA has not been broken above from April 2012.
Strong near-term upside 285 support level is visible on a daily chart. Any pullback from the strong long-term upside resistance should be supported from the 282-285 zone. A daily close above the 299 level is required for the upside reversal extension. This daily close could then target 324 level in extension.
Look for either a daily close above the 299 level or a pullback into the 282-285 zone for the long trade entries.
We have used the combination of the top-down trading analysis to get these key levels explained on the charts.
