Gains are expected to the next resistance at $7,530 a ton, was the statement from the Northern Pegasus analyst team this week. They went on to say that, according to their technical projections, this price-point should serve as the pivot for $8,500 further out, Smith wrote. A long is a bet on higher prices and so-called resistance levels may identify clusters of sell orders.
Copper for delivery in three months on the London Metal Exchange, which more than doubled last year in part because of stockpiling in China, has fallen 1.2 percent this year. The metal, used in construction and automobiles, reached a record $8,940 a ton on July 2, 2008.
Base metals are expected to continue to rally and Smith also recommended looking for the Northern Pegasus memo also alluded to further strength in nickel and zinc – presumably these projections also result from the technical analysis methodologies employed by the firm.
One analyst from the firm who did not wish to be identified, said by telephone (in response to a request for comment on the news) that Nickel prices turned above the $18,900 trendline resistance, with $21,325 and $21,525 marking being the next area to watch. The source went on to explain that the metal reached a one-year high of $21,325 on Aug. 13, 2009 and a more than one-month peak of $21,525 on Aug. 21, 2008. On Zinc, the source state that prices are starting to push above the 60-day moving average, which is bullish.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.