We’ve talked about why we love big bases in prior posts, and copper certainly falls into that category as it has done nothing since 2011. The reason copper is relevant today is because it’s confirming a breakout from its seven-year base by hitting four-plus year highs and clearing resistance near 470 to 475. From a risk management perspective, our downside is very well defined, as we only want to be long above 470 and a price target of 588 means that the reward/risk is ridiculously skewed in our favor.
I’ve kept this post short because the chart speaks for itself, but the bottom line is that this breakout in copper is a big one and should not be ignored. We’ve been waiting patiently for this base to resolve itself, and with the strength we’re seeing in the rest of the base metals space, this appears to be the start of a new long-term uptrend. (For additional reading, check out: Commodities: Copper.)
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