Copper 02 (Nov 12 - Dec 25)

Copper 02 (Nov 12 - Dec 25)

Postby winston » Wed Nov 14, 2012 8:48 pm

ATTENTION COMMODITY TRADERS by Jeff Clark

For the past two years, copper has traded in a consolidating-triangle pattern – bouncing back and forth between its rising support line and its falling resistance line.

As you can see in the chart, buying copper at support would have been profitable. So would selling it at resistance…

Eventually, copper will break out of this pattern, one way or the other. And the direction of that break will influence the direction of the overall stock market, since copper and stocks historically tend to move together. There's still plenty of room for copper to bounce around inside the triangle for another few months.

But as the chart shows, copper is approaching its support line. Since buying it at support would have been profitable several times over the past two years, I suspect it will be profitable this time as well…


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Re: Copper 01 (May 08 - Dec 12)

Postby winston » Wed Dec 05, 2012 9:47 pm

A Major Reversal in Copper By Matt Badiali

The trend in copper is bullish, and this time it's for real.

Back in September, I warned investors to beware of the rally in the copper price. From August to September, copper rallied 15%.

Investors were responding to the latest round of U.S. quantitative easing. But I knew that China – the world's largest consumer of copper – was sitting on a huge supply. That massive supply was going to kill any rally.

And as you can see from the chart below, that's exactly what happened. After making a new high in mid-September, the copper price fell 12% over the next eight weeks to bottom in mid-November.

Since then, it's rallied 8%. And I think it's going to keep heading higher.

Once again, China is making money selling goods made of copper.

China's manufacturers' purchasing index (a measure of growth or contraction in that sector of China's economy) hit a 13-month high. And China's exports are once again rising. That should take care of China's copper surplus.

So while September's rally in the copper price was premature, the recent rise, supported by data from China, looks like the real thing.

Here's what I told readers of my S&A Junior Resource Trader on Monday:

Remember, copper is used in all kinds of manufacturing, so an uptrend in copper prices is usually one of the earliest signals that the world's economy is healthy. That's why we sometimes call it "Dr. Copper"… because it gauges the world's business activity better than any PhD economist.

The rise in copper over the last few weeks is bullish and is solid evidence that China's economic situation might not be as bad as everyone thinks. Recent manufacturing data out of China show that things are better than the market believed they were even a couple weeks ago.

The market action is confirming the improving fundamentals. Copper has managed to hold above its recent lows around $3.35 per pound. It has also strung together a bullish series of "higher highs and higher lows." This is all positive price action.

We're long copper in my S&A Resource Report, too. We bought Southern Copper (SCCO) back in January. We're up 25% so far, including dividends.

I told readers to buy Southern Copper up to $35, so it still represents a great opportunity for investors. You could do as well with giant copper miner Freeport-McMoRan (FCX). Another stealth copper play would be major gold miners Barrick Gold (ABX) and Newmont Mining (NEM). Both generated about 12% of revenue from copper last year.

With copper's rally acting as a tailwind, it makes sense to own copper producers here.


Source: Growth Stock Wire
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Re: Copper 02 (Nov 12 - Dec 13)

Postby winston » Wed Jan 09, 2013 9:20 pm

This Chart of China Copper Imports Will Probably Shock You By Matt Badiali

The copper market has turned 180 degrees in under six months.

Back in the summer, I was concerned that massive stockpiles of copper on China's wharves would hurt the copper price. Since China consumes around 40% of the world's copper supply, it's a huge factor in the market.

But China's manufacturers must have worked through the supply, because it just set a monthly import record in November. That's hugely bullish news for copper producers… and their shareholders.

Take a look at the chart below. In November, China imported more copper than ever before…

Since 2009, when the world economy slowed, China's copper imports have been stuck between 450,000 and 700,000 metric tons per month. But by last November, imports nearly doubled from the bottom of their range.

That confirms what I told you last month:

China's manufacturers' purchasing index (a measure of growth or contraction in that sector of China's economy) hit a 13-month high. And China's exports are once again rising. That should take care of China's copper surplus. So while September's rally in the copper price was premature, the recent rise, supported by data from China, looks like the real thing.

Copper already hit a new short-term high at the beginning of the year. This is solid news for copper-producing companies…

The base-metal mining sector has struggled since 2011. Large miners like Freeport-McMoRan are down more than 30% from their 2011 highs. Given these losses and global economic worries, there's plenty of pessimism toward the sector.

Despite improving data (including the rebounding iron ore numbers I showed you last week), investors are still terrified of a China slowdown. That's why contrarian investors should look here to make money in 2013.

In my S&A Resource Report, we've already started…

Readers are up 35% on giant copper producer Southern Copper (SCCO) over the last year.

We bought the trophy copper company because it has the world's largest volume of copper reserves. Based on current reserves and production rates, it could operate for 144 years without ever looking for new material.

My typical rule of thumb is to buy these companies at 10 times cash flow or lower. And the Bloomberg estimate for 2012 cash flow from operations is $3.4 billion. The company's market value is $33 billion… so its valuation is right in the sweet spot at 9.7 times cash from operations.

And the company returns a lot of that cash flow to shareholders. We collected $3.70 per share in dividends in just one year… almost a 12% yield.

Resource investors should consider the copper sector in 2013. Global central banks are running the printing presses… which is keeping the economy afloat. If China's demand for copper continues, we'll see solid gains from cheap copper miners.


Source: www.growthstockwire.com
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Re: Copper 02 (Nov 12 - Dec 13)

Postby winston » Thu Jan 17, 2013 5:51 pm

Copper Smelters in China, Japan Secure 10% Increase in Fees

Jiangxi Copper Co., China’s biggest copper smelter, and Japan’s Pan Pacific Copper Co. said mining companies will pay them at least a 10 percent increase in fees to process the metal in 2013, climbing for a third year.

http://www.bloomberg.com/news/2013-01-1 ... es-1-.html
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Re: Copper 02 (Nov 12 - Dec 13)

Postby winston » Mon Jan 28, 2013 8:03 pm

Copper: Growth in the supply of copper will be slow over the next five years and demand should increase, especially from China as the country's infrastructure and auto markets stabilize.

Copper ended 2012 at $3.61/pound. The 2013 projection is $3.90/pound, up 8.03% from 2012.

The 2014 projection is $3.72/pound, up 3.05% from 2012.


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Re: Copper 02 (Nov 12 - Dec 13)

Postby winston » Mon Feb 04, 2013 9:13 pm

Copper prices surge to their highest level in nearly four months.
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Re: Copper 02 (Nov 12 - Dec 13)

Postby winston » Tue Feb 05, 2013 8:58 pm

How to Profit From A Potential Double in Copper Prices By Brett Eversole

"I think copper has at least 50% upside from today's price…" legendary analyst Adrian Day told me recently.

"I wouldn't be surprised to see the price double by the end of the decade."

When Adrian talks commodities, I listen… He's written his Global Analyst newsletter for over 25 years. At one time, it was one of the most popular investment letters in America, with over 60,000 subscribers. And for a decade now, he has focused on commodities for customers of Adrian Day Asset Management.

Today, Adrian has his sights set on copper… Over coffee last week, he explained why copper prices could soar. He also shared his favorite way to profit from it. Here's the story…

Adrian believes there's a big opportunity in copper. It's a simple story of supply and demand…

"In recent years, we've seen a record copper price and record demand. Yet production has actually declined," Adrian told me. "Output from Escondida, the world's largest producer, is down 25% over the last five years."

Adrian explained there are currently 82 new mines set to come online by 2020. "About 80% of them had their start dates delayed in the past 12 months. The future supply of copper is anything but certain."

With uncertain supply, a "pop" in demand could easily send copper prices soaring. And Adrian sees China as an obvious source of continued demand growth…

China's copper demand has tripled in the last 15 years. Based on where the country is in its development cycle, I believe demand will triple again over the next 15 years.

By 2020, world copper production won't even meet China's demand.

Adrian's story here is simple. It's Economics 101.

With demand exploding and supply decreasing, the copper price has only one way to go… higher. Again, Adrian says prices could double by 2020.


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Re: Copper 02 (Nov 12 - Dec 13)

Postby winston » Tue Feb 12, 2013 9:11 pm

A BIG MOVE AHEAD FOR COPPER by Brian Hunt

Commodity traders take note: copper is now in a "compressed" state.

Back in August 2011, we highlighted the compressed state of the euro. This is a situation where an asset's day-to-day volatility gradually dries up and the highs and lows move closer together. These low-volatility periods are often the calm before a storm.

While we don't place much stock in conventional chart-reading at DailyWealth, we've seen compressed situations lead to explosive moves too many times over the years not to watch them closely.

We liken a compressed situation to a tightly coiled spring. As we expected, the euro's compression resolved itself… The euro suffered a huge fall just weeks after our note. That brings us to copper…

As you can see from the four-year chart below, the industrial metal has squeezed itself into a state of compression. The metal's day-to-day volatility has dried up.

Its highs and lows are getting closer together. Given the force of the "Bernanke Asset Bubble," we expect this situation to be resolved to the upside. A big move is ahead…


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Re: Copper 02 (Nov 12 - Dec 13)

Postby winston » Mon Feb 25, 2013 6:21 am

Copper imploded the past week. Major decline in a short period.

Note how it traded laterally for all of January while SP500 moved higher.

It was slowing in momentum and then rolled over. Look back at the typical historical tracking.

Copper fell hard in May 2012 similar to the current drop; the stock market followed it lower and then recovered as copper recovered.

The current divergence is even more stark: SP500 has not faded at all in terms of what happened in 2012. That suggests, some would argue strongly, that stocks are skating on thin ice right now and are ready to fall.

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Re: Copper 02 (Nov 12 - Dec 13)

Postby profittaker » Mon Feb 25, 2013 9:07 am

This is what I have been followng:
winston wrote:Copper fell hard in May 2012 similar to the current drop; the stock market followed it lower and then recovered as copper recovered.


See my blog post: http://profittaker.blogspot.sg/2013/02/market-is-aligned-for-bear.html

But the duration of correction is unknown, so I am taking profits.
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