Broadly speaking, commodities have been a disappointing asset class and that disappointment is compounded by the fact the dollar is weak. However, there are pockets of strength in the commodities complex and that most certainly includes copper.
The iPath Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) is higher by 4.6% over the past week, bringing its gain over the past month to almost 9% and its year-to-date gain to about 12.7%.
Industrial metals like copper, nickel, iron and steel have all rebounded in recent months as traders bet on improving global economic conditions would bolster demand for the base metals after prices hit multi-year lows. Copper‘s technicals merit a look at the moment.
“Before the election last year, Copper hit rising support at and spent a good six months testing this support. After support held for a good length of time, a rally then took place, pushing it up to test the top of falling channel resistance,” according to ETF Daily News. “Of late, Doc Copper is breaking above 6-year falling resistance, which historically is a positive sign for Copper. Positive sign for other companies in the industry? Sure could be.”