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Sahmino callsCommodity

مسCOPPERNeutral

Copper Invalidates the Prior Bearish Call; the $14,430 Close Breaks Through the $14,420 Invalidation and Turns This Card Neutral

Horizon: Short term (8 to 10 days, through about Mehr 23, 1405)

Price when published

$14,430

Support

$14,355

Resistance

$14,544.5

Invalidation

$14,238.5

The levels on the chart

Since writtenunchanged0.0%

Conclusion

The prior bearish call is invalidated; with price sitting between its 50 and 20 day averages, short term China and dollar pressure on one side and long term inventory tightness on the other, we move to neutral on this card: about 50% odds copper stays between $14,238.5 and $14,544.5 through the horizon; for Mes Melli, since its revenue converts at the Exchange Centre remittance rate rather than the free dollar, the rial payoff from this swing will be far more muted than the dollar move in copper.

The evidence

  • The previous card (Mehr 11) was bearish with invalidation at $14,420; the Mehr 13 close of $14,430 broke through that level and invalidated that view.
  • The price now trades above its 50 day average ($14,350.8) but below its 20 day average ($14,486.7), and about 2.8% below the 52 week high ($14,850, the close of Mordad 26).
  • Per ArzDigital (Mehr 11, citing Deutsche Bank), the three month London Metal Exchange copper contract fell more than 2% in the week through Mehr 9; China's industrial profit growth slowed to 4.2% in August from 11% the prior month.
  • The Exchange Centre remittance dollar, the rate Iran's copper exporter converts its revenue at, rose from 1,717,400 to 1,762,815 rials (Mehr 5 to Mehr 13), just 2.6%; the free dollar jumped 14.3%, widening the gap between the two rates to about 52.4%.
  • The short term range sits between $14,355 support (the close of Mehr 2) and $14,544.5 resistance (the close of Mehr 6); a break of the $14,238.5 invalidation (the close of Shahrivar 20) would end this neutral view.

If it holds

If price stays between $14,238.5 and $14,544.5, the base case neutral scenario continues.

If it breaks

If a close falls below $14,238.5, this neutral view is invalidated and the downtrend reopens.

What to watch

China's monthly industrial production and construction data, London Metal Exchange and Shanghai inventory levels, and the free versus remittance dollar gap for Mes Melli.

Every call on this symbol

5 calls; the move to the next call from the prices when written

  1. 6 October 08:59NeutralCopper Invalidates the Prior Bearish Call; the $14,430 Close Breaks Through the $14,420 Invalidation and Turns This Card Neutral$14,430unchanged0.0%
  2. 3 October 08:47BearishCopper broke the $14,420 support and stayed below the 50-day average; I'm bearish on this chart$14,355up0.5%
  3. 29 September 08:54NeutralCopper fell for four straight sessions and moved further from its ceiling; the view shifts from bullish to neutral$14,544.5down1.3%
  4. 22 September 08:47Bullish$62 left to the 52-week high, and in these same three weeks the remittance rate rose higher every day$14,788down1.6%
  5. 19 September 08:47BullishCopper is near its annual ceiling, but what reaches rial is calculated at the havale rate, not the free dollar$14,529up1.8%