Copper: Is it getting ready for an advance towards 414?

Copper has been witnessing a long term down trend since August 2013 and closed at 333.50 yesterday. Provided is weekly chart in which correction from top of 512.65 took place in a channelized manner and this metal found support near 291 whereas 284.10 was the swing low posted in 2010. Most recently copper recovered from 298.05 which is 88.8% Fibonacci correction of bullish swing AB. Swing AB itself is 61.8% correction of bearish swing XA. Fibonacci relationship between these swings hints possibilities of a harmonic structure that can be either Bearish Gartley or Bearish Crab. In case if pattern unfolds as bearish Gartley then current rally is likely to be terminated from 358 zones after completing leg CD of this structure. Presence of descending trend line resistance near 358 also increases significance of this structure. In case if pattern unfolds as bearish Crab then an advance to complete leg ‘CD’, which is 161.8% extension of leg ‘XA’, can’t be ruled out. And this extended rally will take this metal towards 414 zones.

Areas of 332 have been very crucial role since start of 2015. Once again this metal has climbed above this level and further stability above same will strengthen our bullish expectations in this metal. Any failure and stability below 317 might hurt bullish sentiments but failure of this setup will be confirmed if most recent swing low 298.05 is taken out. Areas of 326-320 can be used for accumulation for a primary rally towards 358 and then 414 zones. Areas of 315 can be used as protective stop loss for your long trade.

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