“Chile is by far the world’s largest producer of copper and given the talks of increased infrastructure spending in the U.S.; copper-related assets are on the rise. Taking a look at the chart of the iShares MSCI Chile Capped ETF (ECH), a common exchange-traded fund used by investors for gaining exposure to Chilean companies, the price of the fund was able to fund support near the 200-day moving average after each significant pullback in 2016,” reports Investopedia.
Industrial metals producers have been trimmed the fat, cutting production and increasing efficiency to support prices. Additionally, any further delays in a Federal Reserve rate hike would help keep pressure on the dollar and support metal prices.
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Other data points support the thesis that copper could potentially deliver more near-term upside. On Tuesday, copper for December rose thanks to encouraging Chinese economic data.
Regarding ECH, “the bullish crossover between the MACD and its signal line will also be used as confirmation of a move higher and most traders will likely maintain a bullish outlook on the ETF until the price closes below either the swing low of $36.70 or the 200-day moving average, which is trading at $36.78,” according to Investopedia.
For more information on the copper market, visit our copper category.