Jordan Roy-Byrne, CMT

Copper

At the time of last week’s missive, the weekly chart looked bearish. However, the market finished the week strong, forming a bullish hammer on the candlestick chart. The market followed through in the last few days as it broke above 340 to a 19-month high. The weekly close above 340 probably spooked some shorts. Recent data has been mixed. The Case-Schiller index of US home prices showed an unexpected rise in January. Any improvement in the housing market would be bullish for Copper. Meanwhile, we found out that employers cut 23,000 jobs this month. The expectation was for a gain of 40,000. Weak economic data would be more bullish for Copper as it would prompt calls for more stimulative measures. Interestingly, China’s Jianxgi Copper is looking for reduced demand due to cuts in spending on the power industry, which accounts for 45% of Chinese demand. Today we are seeing weakness in the US Dollar and strong metals prices across the board. Technically, the next resistance point is 380 while support is 345. Certainly there can be some short-term upside but traders and investors should be advised of the large overhead resistance at 380.

Platinum

As we go to press, Platinum is higher by about 1.6%. As with Copper, Platinum reversed to end last week and now we see excellent follow through in the first half of the week. The metal is higher by more than 3% since Friday’s close. Anglo Platinum, the world’s biggest producer of Platinum, made some bullish comments today on the metal. Neville Nicolau, the company’s CEO is looking for a nice rise in price and believes the price will err on the high side. He noted that the price of Platinum has been solid due to a mixture of demand. Automotive and industrial demand has increased as of late. As a result, demand remains solid. Assuming the market can close the week near present levels then it would constitute a major breakout. A daily and weekly close at or above 1650 would be significant. We note a thin zone of resistance from 1600 to 1800. If the market can “follow through” then it has decent upside in the near term.