LME copper Q4 target $6,037.50/T

SINGAPORE: LME copper will fall to $6,037.50 per tonne in the fourth quarter, with a downside potential at $4,500.

A long-term uptrend that started at the 2008 low of $2,825 has been reversed, and the metal have moved into a long-term bearish cycle which may last a few years.

The preceding uptrend has been climbing within a rising channel, and a duplicated channel from it defines a price band with the lower channel line pointing to $6,600, which will be easily reached as the current bearish momentum is very strong.

A more realistic target will be $6,037.50, the low touched in June 2010 and a presumed wave "B" trough.

The current scenario seems to be repeating what happened in 2008, when copper fell 60.54 percent from Sept 1 to Dec 30, and it won't be a surprise if the metal slides to $4,500, as pointed by the lower channel line of the third channel.

No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.

Copyright Reuters, 2011