Copper Is Nearing A Short Term Top
Copper ($HG-H3) is a leading metal that many traders and investors follow very closely. Since early June, copper has really inflated and surged sharply higher. The important metal is now trading into an important resistance level on the daily chart. Traders and investors should now watch for resistance around the $3.70 level on copper futures. This area is a past breakdown level from October 19, 2012, past support levels will now be resistance levels. This tells us that copper will now need to consolidate or pullback before moving higher on the chart. Should copper decline with volume, it could bring copper prices back down toward the $3.45 level, which is near term support. Copper will have very good weekly chart support around the $3.27 level should it decline further.
Traders can also follow and trade copper closely by using the iPath Dow Jones UBS Copper Total Return Sub-Index ETN (NYSEA: JJC). The JJC is also ready for a pullback at this time. Please remember, copper will also come under selling pressure when the U.S. Dollar Index futures (DX-Z2) are stronger. A fair case can be made that most commodities will trade inverse to the U.S. Dollar Index. Some leading copper stocks that could be vulnerable to downside action if copper declines include Freeport McMoran Copper & Gold Inc (NYSE: FCX), Southern Copper Corp (NYSE: SCCO), and Teck Resources LTD (NYSE: TCK).
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.