June 2009 | Base Metals
Up again, but the picture could turn bearish quickly: Technical Analysis
Technical analysis of the base metals
We ran with the long last week as our shorting level at $1,570/tonne was not touched. However with stochastics crossing lower on Friday at $1,660/tonne we would have taken a small profit and indeed gone short as well, as both stochastics had fallen below the 80 level. The price strength last week was seen without highs being made in the technical indicators, which shows divergence. This is a negative and adds weight to the view that prices may have run out of steam, especially after they failed to rechallenge the early June highs at $1,700/tonne, having got so close. The high last week was $1,688/tonne. However, with the uptrend strong, we will be nervous shorts, but will get more comfortable if prices fall below the uptrend line at $1,605/tonne and then again if they drop below $1,570/tonne.
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