While March copper initially managed an upside breakout on the charts overnight, the range was rather large and that could embolden the bears technically in the event that copper prices fall back toward unchanged levels through the US scheduled data window later this morning. However, the copper market saw some positive news flow from China overnight, as some Chinese copper users hinted at a tightening of scrap copper supplies and the potential for a shift back toward the purchase of refined copper supply. Shanghai copper prices were higher overnight and that in conjunction with generally positive initial US equity market action could leave the bull camp with a slight edge. However, as in the rest of the metals complex, copper prices clearly needs almost a perfect storm of positive economic news to claw higher on the charts. Some copper players might be unwilling to take positions ahead of the Chinese PMI report tonight, as that report might be the biggest copper demand signal of the last three weeks. On the other hand, the copper market might take some surprise direction from Fed dialogue today, as that could be the critical development of the US trade today. LME copper stocks overnight were down 2,425 tons and that probably provides a minimal lift to copper prices this morning.
COMEX COPPER (MAR): Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The close above the 9-day moving average is a positive short-term indicator for trend. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside target is at 399.26. The next area of resistance is around 394.72 and 399.26, while 1st support hits today at 385.78 and below there at 381.37.
StockMarketNews Research Team