Buying copper has been one of the most profitable trades this month, with the metal gaining close to 8 per cent since the start of December.
Copper price analysis shows the recent bullish breakout could still have significant upside potential.
Copper medium-term price trend
Copper technical analysis shows that the metal is technically bullish and still has room to run to the upside before a correction may occur.
The key level to watch is $2.60 for copper bulls. While the price remains above the $2.60 level the recent breakout up move could reach $3.20 before retracing.
The $3.20 target is taken from the size of the bullish reversal pattern on the lower time frames. Interestingly, an even larger bullish reversal pattern could form if the price breaks above $3.00.
Traders should also be aware that if the price reaches $3.00 then a bearish head and shoulders pattern will be invalidated on the daily time frame.
The overall invalidation target is situated around the $3.80 level. This would mean a substantial price advance if the bullish scenario were to occur. It really is the trade to watch going into 2020.
Copper short-term price trend
Copper technical analysis shows that the metal is only bullish over the short- term while the price trades above the $2.67 level.
With this in mind, the short-term trend is still not that strong, considering where the price is currently located.
Traders should be mindful that a downside correction could take place, especially given the strong run that copper has had so far this month.
At present, the $2.67 to $2.60 area appears to be the likely downside target. The strength of dip-buying from these levels will certainly be interesting.
Watch out for more short-term strength in copper if we see a solid technical bounce from the mentioned technical support levels.
Copper technical summary
Copper price analysis suggests that the metal could surge towards the $3.80 level if the $3.00 level is breached with conviction.
A minor technical correction may take place towards the $2.60 area before the strong bullish trend resumes.
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