One market that garnered significant attention last week due to its price movement was copper, often dubbed as 'Dr. Copper' in financial circles for its perceived economic indicator role. The surge in copper prices, driven by talks of production cuts during a meeting of Chinese smelter operators, led to a notable 6% gain in copper futures, sparking interest among global traders.
Analysis of the copper market revealed a positive trend as the yearly pivot at $3.92 was convincingly surpassed, signaling potential further upside as long as prices remain above this level. Despite facing resistance at $4.355, the recent nine-month high and the upward movement of the on-balance-volume (OBV) are indicative of a potential bull trend, pending confirmation.
On the daily chart, copper futures have been trading above the daily starc+ band, suggesting a possible sideways or pullback movement in the near term. Key support levels lie at $4.00 and the 20-day EMA at $3.950. The OBV, though lagging behind price action, has shown positive signs with the Herrick Payoff Index (HPI) indicating a shift in money flow towards positivity.
For those not directly involved in commodities trading, Freeport-McMoRan (FCX), a major global producer of gold and silver, presents an alternative investment avenue. With an impressive 18% increase in March and a 12% surge last week, FCX has broken above its monthly downtrend, potentially targeting $71-$73. However, caution is advised as the stock is currently in a high-risk buy zone.
As the stock market experiences reversals and uncertainties, particularly in the semiconductor sector post-jobs report, the upcoming FOMC announcement on Wednesday could be a pivotal event. Traders and investors are advised to monitor market developments closely and await potential consolidation or correction in copper futures and FCX for favorable risk/reward entry points.
