I see many commodity bulls blogging away on social media and various web sites. Copper futures prices have been soaring higher for more than the past year and are back to levels not seen since 2011.
One smart technical analyst that I have followed for close to 30 years sent me an alert that prices were extended on a monthly basis so I decided to check out the charts again.
In a review of Southern Copper Corp. (SCCO) back on Sept. 3 we wrote that copper futures, "The height of this bottom formation when projected upwards from the breakout point gives us a potential price target in the $4.50 area."
Let's see how the charts look now.
In the daily bar chart of the continuous copper futures, below, we can see that prices stalled out around $4.37 - short of our $4.50 target area. Prices have tested the rising 50-day moving average line a few times in the past couple of weeks.
The On-Balance-Volume (OBV) line has made a minor peak in late March and has turned soft suggesting a shift from aggressive buying to aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator is close to the zero line suggesting weak trend-strength.