Copper prices are down over 10% in the past month and now test a key area of support.
Remember, these are technical comments only. Just as you must be aware of fundamental data for the stocks we recommend based on technical criteria in the report, so too must you be aware of important data regarding delivery, market moving government releases, and other factors that may influence commodity pricing. We try to limit our technical comments to the most actively traded contracts in advance of delivery, but some contracts trade actively right up to delivery while others taper off well in advance. Be sure you check your dates before trading these contracts. For questions regarding this section or additional coverage of commodities email will.gibson@nasdaq.com.
Data represented in the table below is through 8/6/2024:
Broad Market Commodities Report
Portfolio View - Commodity Indices
| Symbol | Name | Price | PnF Trend | RS Signal | RS Col. | 200 Day MA | Weekly Mom |
|---|---|---|---|---|---|---|---|
| CL/ | Crude Oil Continuous | 73.20 | Negative | Buy | X | 78.32 | - 3W |
| DBLCIX | Deutsche Bank Liquid Commodities Index | 448.76 | Negative | Sell | O | 479.73 | - 4W |
| DWACOMMOD | DWA Continuous Commodity Index | 819.08 | Positive | Buy | O | 834.49 | - 9W |
| GC/ | Gold Continuous | 2389.10 | Positive | Buy | X | 2180.70 | - 1W |
| HG/ | Copper Continuous | 4.01 | Negative | Buy | X | 4.11 | - 11W |
| ZG/ | Corn (Electronic Day Session) Continuous | 388.75 | Negative | Sell | O | 443.31 | - 10W |
When we last discussed copper it was severely underperforming gold, contributing to a key relative strength signal change. Since then, the base metal has continued lower (which makes sense given the direction of interest rates) and now tests a key level of support.
Over the past month copper continuous (HG/) has lost nearly 14%, culminating in five consecutive Point & Figure sell signals on the default chart. Interestingly, that is the most consecutive sell signals we have seen since July 2022…which was a near-term bottom. The current oversold (OBOS) reading and state of the futures curve are also supportive of a bounce.
As of yesterday’s close, HG/ sported a -84% oversold reading which was the most negative we had seen since July 2022 (too). Additionally, the copper futures curve is in steep contango which means future prices are sharply higher than the spot price. For what it’s worth, the copper futures curve is presently much steeper than other metals.
To bring home today’s discussion notice the positive trend line test on the copper continuous long-term chart below. This trend line was established in March of this year, so a break beneath would certainly be notable. (CPER too is testing its positive trend line.) Further support for HG/ is offered at around $3.60.
