SINGAPORE: LME copper may test a support at $7,608 a tonne in the next quarter, with a good chance of breaking below this level and falling to the next support of $6,844.
The rise from the July low of $6,955 roughly observes a set of retracements on the uptrend from $4,371 to $10,845.
The metal seems to have lost its momentum after briefly piercing above a resistance at $8,372.
The rise has been shaped into a wedge, which looks like a bearish continuation pattern, as it appeared after a sharp downtrend.
The wedge clearly shows a three-wave structure. It may have completed around a key resistance at $8,717.
Even if the pattern unexpectedly develops into a five-wave structure, the metal is still likely to retrace to $7,608 first before climbing towards $8,372.
The wedge is a part of a downtrend from $10,845, which may eventually extend to $5,251, as suggested by a rising trendline.
The downtrend is against an uptrend from the 2008 low of $2,817.25.
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A break above $8,717 could lead to a gain to $9,317.
On the daily chart, the wave c could be well broken down into five waves, with a failed fifth wave labelled 5.
A projection analysis reveals a resistance at $8,583, around which, both the wave 3 and the wave 5 completed.
There could be only one explanation to this coincidence that the wave c is over.
The lower trendline of the wedge points at a target of $7,741.
Once the metal falls to this level, the downtrend from $10,845 would be considered as having resumed.
A break above $8,583 may open the way towards $9,104-$9,425 range.
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