Opportunity in Copper (w/ Joe Perry) | Trade Ideas

Opportunity in Copper (w/ Joe Perry) | Trade Ideas


Welcome to Trade Ideas. I’m Jake Morel, sitting down with Joe Perry
of Forex Analytix. Joe, it’s great to have you back on the show. Thanks, Jake, glad to be back. So, let’s get right into it today. What’s your trade idea? I’m looking at copper right now on a daily
chart primarily. And if you look back, going back to 2018,
you can see that every time we’ve put in a high in the RSI, we’ve sold off. We’ve done that one, two, three times, going
back to then. And now we’re at a high again. The RSI is lower though. Which makes me think there’s still room for
price to go higher until the RSI gets into that overbought territory, where it’s going
to roll over and then they’ll sell off again. Also, it seems to be gravitating around this
$3 level. We’ve been higher, going back to last year,
and then halfway through the chart, you can see that we’ve been in the lower half. We’re back up to that level right now. We’ve put in a double bottom. And you can see that as we bounce off that
double bottom, there are a couple of different ways you can look at this. We bounced out of it, and we’re putting in
like a pendant formation. The extension of that goes up to about three
and a quarter.l that’s where I’m targeting. Also, you can see that on that pullback, we’ve
pulled back to less than a 0.3 to a retracement level. That’s a very small pullback, which is another
reason that makes me think we’re going to go higher. And we also have ascending triangle formation
right here. So I’m looking to get in this trade right
around the market level here at about 290, and I’m looking for three and a quarter on
the upside. So Joe, in addition to all the things you
just laid out, are there any other technicals you’re watching out there that’s confirming
your thesis? Well, you can also look at it from a harmonics
perspective. If you go back and you look at the low earlier
in the year, you can see that we’re trading in A, B, equals C, D pattern. So it’s kind of like you take the A, B, and
you extend it higher from the bottom of the C. And you kind of get a target up around
that same three and a quarter level. And also, actually, you can also see there
is a little inverted head and shoulders there. At times, those are continuation patterns. They could be reversals, but only if they’re
at a bottom. And this is not at a bottom. It’s right in the middle a pattern. Those tend to be continuation patterns. Also with the harmonics, if we do continue
higher, up to that level around three and a quarter, or 320, that I was looking at,
that would be a bat pattern, which is where you would typically look to be getting short. And that would coincide with around those
previous highs. So, in addition to the technicals you just
laid out, is there anything else out there that you’re looking at that you think is important
for this trade? Well, I’m looking at the Australian dollar,
and that correlates very high with copper. The dollar itself has been very low volatility
lately, in the dollar. It’s been at about a five year low. So anything that has to deal with the dollar,
if you look at it, it’s been in a really tight range. The dollar itself actually has been trading
between 95 and 98. The euro’s been trading between 112 and 116. There hasn’t been much to do there. Now, finally, seeing something here with the
Aussie. It looks like it’s starting to break out of
a triangle. It’s right at the 200 day moving average. So the Aussie looks like it could be moving
higher out of that triangle, up towards 74. And if that does happen, it looks like copper
should move with it, as they’re correlated. And so I know copper is kind of a touchy subject
for most traders. Are you looking at positioning, inventories,
other data points, anything like that? Or is this purely just based on the technicals? It is based on the technicals. I am looking at China, obviously, because
China and copper and Australia are so correlated. And the data, lately, that’s been coming out
from China, if you look back at that trade balance, was through the roof. Retail sales just the other day beat industrial
production, which is huge for copper. They were expecting 5.9. And it came out at eight and a half, which
is ridiculous. So you see these numbers coming out much stronger. They also said that they’re going to provide
new stimulus to help boost consumption. So if all of these actually are true, then
copper should rise with China and also bring Aussie higher as well. So given all this information, what would
you say is the biggest risk to this trade? The biggest risk is that China doesn’t come
through. And China’s kind of has– you know, people
have been talking about these green shoots coming up, and this is it in the data. If this data rolls over, things next month
turn out to be worse, the demand won’t be there as expected right now, and then copper
will probably roll over as well. Joe, can you please break down this trade
in 30 seconds? Sure, so I’d like to enter copper right around
here, market, which is around 291, 292. I’m looking for 320 to 325 on the upside,
stop below 280. Joe, that was great. Thanks so much for joining us. Thanks, Jake, it was great. So Joe is bullish on copper. Specifically, he suggests going long at 290
with a stop loss at 280 and a target price of 325 over the next three months. That was Joe Perry of Forex Analytix. And for Real Vision, I’m Jake Merl.

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