Copper is moving in a clear uptrend. The metal's stocks have been declining in recent months and hit their lowest level since 2008. Meanwhile, copper production on the global market increased by 4.5%.
Copper posted the best performance this year, with the price going up 6%. Other metals, including zinc and nickel, have not fared well amid global financial worsening.
Goldman Sachs noted that if demand for copper in China continues to rise as fast as it did in February, global inventories will run out by the third quarter of 2023. Last month, the metal’s demand in the country rose another 13% as activity spiked due to the Lunar New Year, coming earlier than usual.
Copper deficits could trigger fluctuations in commodity prices, with manufacturers, traders and consumers struggling to find enough money to cover margin requirements and avoid a liquidity crisis.
Odds are good that copper shortages and rising metal prices will persist for the rest of this decade.
The copper price is still in the bullish trend near the support line on the 1-hour timeframe. A Stochastic Oscillator (standard values) points to the rebound from this line, while exiting the oversold zone.
The daily timeframe indicates an emergence of the flag. The metal’s price has moved outside this figure, the shaft is ascending, suggesting a further uptrend.
The price has now shoved back from the rising support on the 1-hour timeframe, staying in a buy zone, thus giving an opportunity to enter the trade at the current price.
A signal could be the following:
Copper's medium-term outlook is a buy one.
The target is at the level of 9550.
Some profits should be taken around 9130.
Stop Loss can be placed near 8660.
The bullish trend is a medium-term one, so it's worth setting a trading volume not higher than 1% of one's balance.