Dr. Copper Is Accepting New Patients

 | Jul 17, 2017 | 12:27 PM EDT
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(JJC) is the symbol for the iPath Bloomberg Copper Subindex Total Return ETN, a real mouthful. Copper prices are often used as an "up to the minute" short-hand for the health of the economy. Like many short-hands or "rules of thumb," they are observations that have worked enough in the past for traders become reliant them.

In this updated daily chart of JJC, below, we can see that prices had a strong rally from October to February before a three-month correction unfolded. After a test of the rising 200-day moving average line in May, JJC has worked higher, crossing above the now rising 50-day moving average line. Volume has seen some short-term spikes but the On-Balance-Volume (OBV) line did not bottom until June. The Moving Average Convergence Divergence (MACD) oscillator turned above the zero line last month for an outright go long signal.

In this weekly chart of JJC, below, we can see that prices are above the rising 40-week moving average line which was tested several times over the past two months. The weekly OBV line shows much more aggressive buying than the daily OBV line. The weekly MACD oscillator is crossing to the upside above the zero line for a fresh go long signal.

In this Point and Figure chart, below, we can see the price action since December as a consolidation pattern. This chart only yields an upside price target of $32.28 which could mean that JJC makes a rough double top. It is too soon to say whether prices can reach $32.60 which will be a fresh breakout and should allow for more bullish price targets.

Bottom line -- JJC is pointed higher but we don't want to get too bullish before see a breakout at $32.60.

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