- LME Copper
- LME Aluminum
- LME Lead
LME Copper
LME copper pulled back from an all-time high of $14527.5 in late January and then began to consolidate into a range that has formed a flat ascending triangle. This is typically a continuation pattern that will break in the direction of the move prior to the formation of the pattern. The challenge is that in this case, the move down occurred over only a few days, and the false breakout that occurred on March 9 weakens the odds for a break lower out of the triangle.
Nevertheless, the outlook for copper leans bearish for the coming weeks. As stated, copper broke the lower trendline of the flat ascending triangle on March 9 and then rose to close back above the 20- and 50-day moving averages. Even so, the 62 percent retracement from $13527 (pink) at $13166 was held on a closing basis. Prices pulled back from this threshold on March 11 to test and hold above the 20- and 50-day moving averages. This makes the call tight, but the 20-day moving average crossed below the 50-day moving average on March 11, which is bearish. The move up to test and hold the 62 percent retracement might form a short-fall signal within the triangle. This is a signal that forms within patterns like a triangle when prices fail to test the upper or lower trendlines of the pattern. It is too soon to definitively state this is the case, but a close below the $12571 smaller than (0.618) target of the wave down from $13527 (light green) will confirm a break lower out of the triangle, opening the way for a test of this wave’s $12152 equal to (1.00) target. This is a key objective because $12152 is also in line with the smaller than target of the primary wave down from $14527.5 (green) and the 38 percent retracement of the rise from $8105 (dark blue). This wave connects to $11413 as the equal to (1.00) target, which sits just above the 50 percent retracement. Therefore, a sustained close below $12152 would confirm that a bearish reversal for copper is unfolding.
Nonetheless, this remains a tight call for the near-term due to the false breakout of the triangle on March 9 and the fact that prices are holding above the 20- and 50-day moving averages. Should prices rally and close above the $13295 smaller than target of the wave up from $12583 (light purple), look for a test of key resistance at $13574. This is in line with the equal to target of the waves up from $12414.5 (orange), $12528 (orchid), and $12583. More importantly, the $13574 level sits above the upper trendline of the flat ascending triangle. Therefore, closing above this will indicate that the pattern has failed and would put the odds in favor of copper rising to $13875 and higher in the coming weeks.
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LME Aluminum
Aluminum broke higher out of a bearish flag on March 2, causing this bearish continuation pattern to fail. The subsequent move up was aggressive, and aluminum finally settled above the 62 percent retracement of the decline from $4073.5 at $3212. Prices rose to a new recovery high and settled above several other key wave projections, including the larger than (1.618) target of the primary wave up from $2080.5 (red) and the XC (2.764) projection of the first wave up from $2979.5 (purple). The move up is now poised to challenge the $3572 XC projection of the primary wave up from $2300 (dark red), the equal to target of the wave up from $2770 (pink), and the smaller than target of the wave up from $3015.5 (orange). The confluence and importance of $3572 makes it a potential stalling point. However, one will want to see bearish patterns (such as candlestick or geometric patterns) or other signals (such as momentum overbought/oversold or bearish divergences) be confirmed around this objective to indicate that another test of support will occur. Closing above $3572 will clear the way for $3635 and likely another highly confluent and key objective at $3772 within the next few weeks.
That said, the pullback from $3543.5 confirmed daily bearish KasePO, RSI, and Stochastic divergences and an overbought KaseCD signal. The correction following these signals has probably already played out because prices have settled back above the 62 percent retracement from $3543.5 (pink). Nonetheless, the 78 percent retracement was held on March 11, so there is still a modest chance for a deeper test of support. Closing below the $3323 smaller than target of the wave down from $3543.5 (green) would call for a test of the $3203 equal to target. This is key support because $3203 is also the 62 percent retracement of the rise from $2979.5 (blue) and protects the 20- and 50-day moving averages. Settling below $3203 would shift the odds in favor of aluminum falling to $3103 and possibly $3039.
LME Lead
Lead settled back below the $1938 lower threshold of a wide trading range between $1938 and $2102 that contained prices for several months on March 11. However, sustaining a close below $1938, which is in line with the smaller than target of the wave down from $2104.5 (green), the 62 percent retracement of the rise from $1837.5, and the prior swing low of $1937.5, has been a challenge.
The outlook for lead is bearish, given the close below $1938 and because prices have held below the 20-day moving average and the 21 percent retracement of the decline from $2102 (pink). Lead has consolidated into a narrowing range for the past few days. This small range should break lower to test a highly confluent objective at $1921. Settling below this will confirm a break lower, opening the way for a test of confluent targets at $1896, $1872, and eventually the $1838 equal to target of the wave down from $2104.5 (green) in the coming weeks. This objective is also in line with the April 2025 swing low of $1837.5.
Nonetheless, each time lead has attempted to break lower or higher out of the range in recent months, a reversal has occurred. This repetitive pattern keeps the odds for a decline subdued. Furthermore, a small double bottom around $1927 has formed and would be confirmed by a close above $1965. The connection to $1965 is made through the $1951 smaller than target of the wave up from $1927 (purple). Closing above $1965 and confirming the double bottom would signal that another significant test of resistance is underway. In this case, look for a test of the double bottom’s target around $2000. This is key resistance because $2000 sits above the $1996 and $1998.5 swing highs, the 38 percent retracement from $2102, and all major daily moving averages (20-, 50-, 100-, and 200-day). Settling above $2000 will put the odds in favor of lead rising to $2033 and higher.
Shared content and posted charts are intended to be used for informational and educational purposes only. CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. CMT Association does not accept liability for any financial loss or damage our audience may incur.
