Gold ETFs certainly held their shine in 2020, as did other precious metals like silver. 2021 though may be the year of copper and the Global X Copper Miners ETF (COPX), which is already up 13% year-to-date.
Looking at COPX’s 3-month chart below, we can see a bullish uptrend already forming in Q4 of last year. COPX gained over 60% as the fund spiked near the end of November:
“Copper prices continued their momentum from the second half of 2020 as the second wave of coronavirus infections intensifies in South America, the world’s top copper-producing region,” a Mining.com article explained. “Copper futures for March delivery advanced 0.3% to $3.652 per pound on the Comex, surpassing a near eight-year high set in December.”
“Copper prices have rallied over recent months as demand for the bellwether metal grows on the back of fiscal stimulus hopes and recovery in industrial activities, but rising covid-19 cases and lockdowns have also caused a supply crunch for the most traded metal commodity of 2020,” the article added further.
COPX seeks to provide investment results that correspond generally to the price and yield performance of the Solactive Global Copper Miners Total Return Index, which is designed to measure broad-based equity market performance of global companies involved in the copper mining industry.
COPX gives investors:
- Targeted Exposure: COPX is a targeted play on copper mining.
- ETF Efficiency: In a single trade, COPX delivers efficient access to a basket of companies involved in the mining of copper.
Copper: Time to Buy?
Buyers looking to get in on COPX can use technical analysis to help determine whether a buying opportunity is in play. Looking at its one-year chart below, we see that COPX is currently 34.40, which is almost 30% above its 50-day moving average.
The question now is whether the opportunity is overheating. When we apply a relative strength index (RSI) indicator, it indeed does show that COPX is within overbought level territory. Using a moving average convergence divergence (MACD) filter, the exponential moving average (EMA) line is past the signal line, so potential buyers may want to wait until the EMA crosses below the signal line.
Nonetheless, there’s no question that momentum is on the side of COPX.
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