Copper’s rollback can be used to grow long positions

02 March 2023 163
Copper’s rollback can be used to grow long positions

Copper prices strongly bounced up from the local lows of last Friday, adding almost 5% since the beginning of this week. After such an impulse of growth, it is clear that today we see some profit taking on long positions and a rollback of quotes closer to the round level of 9000. The current drawdown can be used for buy at lower prices since the potential for further growth in copper prices is still far from exhausting. 

Yesterday, copper, like almost all commodities, responded positively to February’s growth of business activity in China to over a 10-year-high. Chinese data indicates a strong economic recovery after most of the anti-COVID restrictions were removed earlier this year. That is a good sign for commodity demand from the world's largest copper importer. 

WisdomTree analyst Nitesh Shah said that PMI figures give more confidence that China will become the main driver of copper demand. He said global copper inventories remain low and prices could rise to $10000 in the coming months, adding that he is a confident bull in the long term because of the growing use of copper in power generation and transmission, as the world will move away from fossil fuels.

The copper supply might face problems. Co-founder and CEO of Coppernic Metals Ivan Bebek said that all easily discovered deposits of valuable metals have already been found. That will help commodities to get out of the bear market, as previous years of underfunding and declining mines are good drivers for price growth. 

You can put orders in the range of 8950-9000 to buy copper. The level of 9150 will be the target of growth. Stochastic will confirm the signal for buy. 

We may offer you the following option of trading strategy: 

Buy copper in the range of 8950 - 9000. Take profit — 9150. Stop-loss — 8850.

Also, traders can use Trailing stop instead of fixed Stop-loss at their disposal. 

This content is for informational purposes only and is not intended to be investing advice.

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