Trend: Short term up. Medium term side­ways. Long term up.

Finweek English Edition - - COMPANIES & MARKETS -

Strat­egy: Traders buy for more fol­low through.

The cop­per price has formed an in­verse head and shoul­ders pat­tern (as la­belled). It’s a bullish chart pat­tern. It’s bro­ken out above line 1 (the “neck­line”) to con­firm that pat­tern. It’s point­ing to a higher tar­get.

The only con­cern is that the short-term sto­chas­tic os­cil­la­tor (on top) is over­bought; but it can re­main over­bought in a strong trend (re­fer to Fe­bru­ary/March 2010).

Traders buy, ide­ally, on a mi­nor pull­back – eg, to 6850 or lower (the price at the time of writ­ing was 6990).

The min­i­mum up­side tar­get is 7550, mea­sured as the height of the in­verse head and shoul­ders pro­jected up. Take most prof­its there but leave some, with a tight stop-loss, such as a break­ing of its prior two-day low to al­low for any fur­ther up­side there­after.

Place your ini­tial stop-loss at a clos­ing price be­low 6620 (spot price).

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