Looking at DBB’s chart, “you can see that the fund has been trading within a defined uptrend and the recent pullback toward the dotted trendline will be used as a guide for determining the placement of buy orders as well as stop-loss orders. Notice how the trendline propped up the price on each successive pullback so far this year,” reports Investopedia.
Related: Strengthening Dollar Plaguing Copper ETN
Copper has been an obvious laggard among industrial metals this year. More concerning in the near-term is the fact that some market observers believe the path of least resistance for copper is lower. JJC’s laggard status could morph into an all out decline as copper prices approach a critical technical juncture. While production cuts may support prices now, the bounce in the copper market may be short lived as fundamental factors remain weak.
Regarding DBB, “active traders will expect this behavior to continue for the remainder of 2016 and based on technical analysis; it is interesting to also note that the long-term 200-day moving average is starting to shift upward, which suggests that this could be the early stages of a prolonged uptrend. Active traders will likely protect their long positions by placing a stop-loss below $12.83,” adds Investopedia.
For more information on Copper ETFs, visit our Copper category.