With the recent rally in Copper prices an interesting technical situation is forming on the longer term charts. In case of failure to break through January highs the futures market will be poised for a sharp correction. The consolidation pattern can be interpreted as a flag formation or perhaps a rectangle / triple top. A probable is scenario is an attempt to break higher followed by a retreat. This retreat might be just a shallow correction where the market would resume the rally. Considering the uptrend is still dominant this has to be treated as a base scenario. There is however considerable risk of a breakout failure pattern occurring. If you are looking for comparisons see how the market behaved in September (shallow correction followed by a rally) and in November (break out and then sharp retreat). This should be helpful in planning the trades. Final note: the wave count suggests a possible important intermediate top forming.
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