Trade idea: long copper
There is an inverted head and shoulders pattern developing on the LME copper chart. As IGTV’s Jeremy Naylor explains, while price action has broken the neckline, the trigger has yet to be confirmed.
This trigger will be confirmed when there is a candle close past the neckline, when this happen the long trade will be crystalised and the price target $9,406.
(AI Video Summary)
Copper demand may be increasing
Jeremy Naylor talks about a possible trading opportunity in the price of copper. Now, if you're not familiar with trading, copper is a metal that is used in many things like electrical wiring and pipes. So, why is this important? Well, there are some signs that the demand for copper might be increasing, which could be good news for traders.
Last year, there was hope that the demand for copper would go up in China after the lockdowns ended. But unfortunately, it didn't happen. However, with interest rates expected to rise next year, there's a chance that demand for copper could rise as well.
Inverted head and shoulders chart pattern
Naylor then analyses a chart that shows a pattern called an "inverted head and shoulders" in the price of copper. Basically, there's a line on the chart that shows the support level for the price of copper. The left shoulder and the head of the pattern broke that support line a while ago, but now there seems to be a recovery. Recently, there was a break of another line called the "neckline", and if the price stays above that line, it could mean that the price of copper will go up.
According to the pattern, the price of copper could go up to a level of 94.06. So, for anyone thinking of making this trade, it's suggested to set a "stop loss" just below the recent price action at around $84 to limit potential losses. If the price keeps going up, then the stop loss can be adjusted to secure profits.
However, it's important to note that this trade is still in a waiting and development stage. The real confirmation will be when there is a candle close above the neckline, which would signal a potential long position all the way up to 94.06.
So, to sum it up, there's a chance that the demand for copper might increase, and this video discusses a trading opportunity based on a pattern in the price chart. But remember, trading has risks, so it's important to be cautious and do your research before making any decisions.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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