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Copper Analysis From Barclays Capital Sees The Bull Market Intact for Copper Prices

“Copper’s bull market is intact and the three-month contract on the London Metal Exchange may rally to an all-time high should an initial target price be surpassed, according to a technical analysis from Barclays Capital.

“The bull trend remains undamaged,” Dhiren Sarin, Asian chief technical strategist, said in an interview. The price may gain to $9,945 per metric ton in the next three months and, if that’s broken, it may climb to $10,300, Sarin said. Copper’s record is $10,190, set Feb. 15, and it traded at $9,147 today.

The upper panel of the attached chart shows copper has been forming a so-called summer base when traced against a three-year trend line that connects the metal’s lows, Sarin said. The lower panel shows the metal’s so-called Z score, which tracks how many standard deviations the price is away from the average. Z scores of -2 show that the price may be bottoming, Sarin said.

Three-month copper has fallen 10 percent since setting the record and it’s on course for a third monthly decline in May. The metal, used in wiring and pipes, rallied 30 percent last year and more than doubled in 2009.

“For the time being, a range is likely as the market is above its lows from the final quarter of 2010,” he said. Copper touched a low of $7,920 on Nov. 17. “The idea is that copper should base in the summer and we get an upside move on the one- to-three-month horizon.”

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