Shanghai copper may break a resistance at 38,970 yuan per tonne and rise further to the next resistance at 39,290 yuan, as its bounce from the August 19 low of 37,960 yuan has extended. Wave pattern suggests the bounce is driven by a wave C, the third wave of a presumed three-wave cycle that developed from the August 7 low of 37,310 yuan. This wave could travel to 39,600 yuan, the 61.8 percent level.
A more realistic target could be 39,290 yuan, the 50 percent level, which will be confirmed when copper climbs above 38,970 yuan, the 38.2 percent level. Support is at 38,590 yuan, the 23.6 percent level, a break below which could cause a loss to the 14.6 percent level at 38,350 yuan. Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own. 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.