Copper is Approaching Make-it-or-Break-it Levels

Metal markets dropped sharply yesterday, with platinum losing 1.5% and silver dropping 3%. This likely sets up the next leg down in the bear market that’s plagued gold, silver, platinum and copper since 2011.

The copper market is of particular interest to Boom & Bust and Cycle 9 Alert subscribers. Both portfolios hold bearish positions in copper that are generating open gains between 20% and 40%.

Based on the two charts I have to share with you today, you’ll see there are bigger gains to come!

First, a chart of copper futures…

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Since the first quarter of this year, copper has repeatedly failed to rally above $3.40 per pound (the horizontal red line above).

Following its last attempt in August, a series of lower highs (the descending red line) and higher lows (the ascending blue line) set up a consolidation triangle pattern.

I’ve been waiting for a breakout from this pattern. Yesterday we got it… to the downside! From here copper futures could slide as low as $3 per pound before finding support. That move could take only a few weeks.

Now, here’s a chart of the company we’re betting against in Boom & Bust AND Cycle 9 Alert

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Currently trading between $26 and $27 per share, I see this company falling to $25 over the next week or so. That level – $25 per share – is the line in the sand. I expect it to hold at first, but eventually to break to the downside; unless we see a miraculous turnaround in the entire metals complex. That’s not likely.

There’s very little in the way of support between $25 and $10, so once the bears push this stock below $25, it could fall as low as $10 per share like lightening. That move could provide windfall profits for anyone with bearish positions in this stock.

I’m keeping a close eye on this market, so stay tuned for more updates over the coming weeks.

If you’d like to know the details of the stock in our portfolios, click here.

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Categories: Markets

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.