Following a sustained upside break of the long-term downtrend in May, the LME 3-month price violated significant resistance at $1,900/t in early-July, likely confirming a reversal in trend direction. Even so, technical indicators suggest that the current upward move could be losing momentum and due for a downward correction. The duration of a downward move is uncertain. It could very well be a short, protracted near-term move, or a more extended move that could test the intermediate uptrend line. A sustained break above $1,950/t would be a significant bullish development. At the time of our last analysis on June 11, 2014, we discussed how the upside break of the long-term downtrend, in place since Q1 2013, that occurred in May was an initial signal that a trend reversal could be underway. We also noted that the intermediate-term uptrend line had been confirmed as active with the price sustaining the upward break of the long-term downtrend.
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