Expect a big bounce in copper near-term: Safetrade Advisors
Published on Friday, March 12th, 2010 at 6:36 PMAuthor: onlinecommoditycalls (1958 Articles)
A strong dollar and concerns on China raising interest rates earlier than expected is keeping the base metal complex. Analysts are approaching the complex with a sell on rally strategy. However, the frequent aftershocks of the earthquake in Chile are also expected to keep prices buoyant.
In an interview with CNBC-TV18, N Prasad, Safetrade Advisors gave his strategy on copper.
Q: Would like to get your strategy on copper because of supply concerns we are seeing some bit of activity on the upside, how do you see the range and how would you trade the commodity now?
A: The commodities may have an explosive day tonight. As dollar index is crashing all along from the morning, it has broken the crucial support of USD 80 per barrel and its trading at USD 79.77 per barrel and euro is also going strong and it has broken 3 weeks high. This can support commodity prices. A weaker US dollar usually spurs the top for base metal prices.
I am expecting a very big bounce in copper. Copper’s technical chart also shows reverse head and shoulder pattern. Anything above Rs 348 per kg in Indian prices could lead to a big rally in copper up to Rs 375. As frequent earthquakes in Chile are also supporting the prices and also the economic optimism which is spurring demand is showing across emerging markets.
With India and China are speaking about higher inflation, and higher GDP growth. I should see no reason why copper should not move from here. It has taken a very good technical support and consolidation for the last few weeks. I think today must be a day where it can show path upwards.
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