Trade idea: short copper amid price drop
There’s been a technical break of the recently established 7866 line of support for LME copper.
Traders have bought back into the metal, but as IGTV’s Jeremy Naylor says, the break opens up the prospect of further lower lows. A candle close below that 7866 support then brings in the 7420 lows of November 2022.
(Video summary)
Profit from falling copper prices
Jeremy believes that there might be a chance to make money by selling copper. He says there has been a drop in the price of copper because people are worried about the world economy. Jeremy thinks that if the US and French economies show more signs of weakness, the price of copper could drop even more.
Copper chart
He shows a chart that highlights the price of copper going up in January but then dropping below an important level in October. Jeremy mentions that the current price is 79.61, which is below the line that shows support from October 5th. He suggests that a good strategy would be to sell copper.
Managing risk
To manage the risk, he recommends putting an order to sell if the price goes above 8000 and waiting to confirm with a candlestick pattern that the price is going down before making the trade. Jeremy thinks that if the price does go below the support line at 78.66, it could go even lower to a support line at 74.20.
In conclusion, Jeremy thinks that the price of copper is low because people are worried about the world economy. He suggests selling copper and waiting for confirmation from a candlestick pattern before making the trade. If this happens, he expects the price to potentially drop to 74.20.
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. See full non-independent research disclaimer and quarterly summary.
React to volatility on commodity markets
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
1In the case of all DFBs, there is a fixed expiry at some point in the future.
See opportunity on a commodity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a commodity?
Don’t miss your chance. Upgrade to a live account to take advantage.
- Analyse and deal seamlessly on fast, intuitive charts
- Get spreads from just 0.3 points on Spot Gold
- See and react to breaking news in-platform
See opportunity on a commodity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
