LME copper may rise towards $6,191 in Q4

• LME copper may break a resistance at $6,007 per tonne and rise towards the next resistance at $6,191 in the next quarter.
• Theoretically, the metal could rise to $6,632.92, the peak of the wave B. For a quarterly outlook, this target looks too far away. A realistic target will be $6,191.

SINGAPORE: LME copper may break a resistance at $6,007 per tonne and rise towards the next resistance at $6,191 in the next quarter, as suggested by its wave pattern and a Fibonacci ratio analysis.

A wave C from the April high of $6,632.92 seems to have ended around $5,475, the 61.8% retracement on the uptrend from the January 2016 low of $4,318 to the June 2018 high of $7,348.

Even though this wave looks much shorter than the preceding wave A, a projection analysis reveals that it is roughly 0.618 times the length of the wave A, the completion of the wave C looks convincing if the uptrend from $4,318 is considered intact.

To put it another way, the fall from $7,348 could simply be a correction against the uptrend which may have resumed from the Sept.3 low of $5,518.

Given that the former support at $5,833 triggered a wave B, which lasted about eight months, there is good reason to believe that copper could stay above $5,475 for a few months, which is a much stronger support.

Theoretically, the metal could rise to $6,632.92, the peak of the wave B. For a quarterly outlook, this target looks too far away. A realistic target will be $6,191.

Strategically, this target of $6,191 will be valid when copper breaks the immediate resistance zone of $5,821-$5,833. A further slide from the current level may be limited to $5,635.

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*** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.