Since trading above the $4.50 mark in Feb11, Copper has been in consolidation mode. The classic diagonal triangle consolidation has twice tested, and thus far held, the $3.00 price level. Volatility levels have moderated.
Copper will continue trading within the range of the triangle formation, between $2.95 and $3.45 levels, until that time when it chooses to do otherwise. We expect yet another test of the $3.00 level. Most importantly, given the age of this consolidation pattern, be prepared for a very powerful breakout of the consolidation range.
Murphy & Company’s position models closed a short copper position on 18Sep13, collecting 5.9 cts/lb on the position.