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Copper Price Posts New All-Time High
On Tuesday, July 8th, President Trump announced a 50% tariff rate on copper, double what he had previously floated for the valuable commodity. This would bring tariffs on copper into line with other industrial metals including steel, and aluminum. Trump’s announcement sent copper prices soaring, and the metal posted its highest single-day gain since 1989. The copper futures contract for September closed Tuesday up 13%, at $5.6855 per pound.

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One way to position for a continued bullish advance would be to go long the United States Copper Index Fund (CPER) , which seeks to track the daily investment results of the SummerHaven Copper Index Total ReturnSM, designed to reflect the daily performance of the investment returns from a portfolio of copper futures contracts on the COMEX exchange.

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Chart Perspectives on CPER

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The shares of CPER have resolved above a five-year classic patterned base formation of the “Head & Shoulders” variety. The bullish inflection above $32, if sustained, clears the way for a projected measured move to approximately $41 [($30 – $19) + $30 = $41], equating to a potential 21% gain from current levels. Momentum has turned up on multiple time horizons supporting the notion that the advance is still early in its trend. Point & Figure analysis projects a higher target of $49 using the 3-box reversal method.

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Relative strength Perspectives on CPER
The shares of CPER are leading the Basic Materials sector, the broad Commodities index, the Base Metals index, and the S&P 500 index YTD. Its weekly RS-Ratio rotated into the weakening quadrant, but its RS-Momentum has since turned sharply higher and appears poised to rotate back into the leading quadrant over the next few weeks.

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Trading CPER
Copper futures are currently attractive due to tight global inventories, ongoing mine disruptions, and rising demand from green energy and electrification projects. Geopolitical factors, such as new U.S. tariffs and trade tensions, are adding to supply concerns and driving prices higher. Additionally, a weak U.S. dollar and low stockpiles in key markets are supporting bullish sentiment, while technical and structural factors suggest the rally could continue.

In our opinion, CPER represents an attractive candidate for new money equity allocations. A limit of $34 on the entry price combined an initial stop-loss provision set at $31.50 would limit downside risk to about 7.4% of capital deployed and establish an attractive 3-to-1 positive risk skew.

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