New York Mercantile Exchange (Nymex) Copper Futures have lost more than -10% since early October, but the market is sending signals that may indicate the bearishness is coming to an end. The market closed Thursday down a 'very big' -3.2% at 335.6. Thursday's 'very big' decline was preceded by three straight losses and coupled with a cross below the lower Bollinger band. This is the third occurrence of this event this year, the first two resulted in reversal of 13.18% and 11.14%.
Q: How has Nymex copper responded to three consecutive declines, the final being 'very big', that cross below the lower Bollinger band?
A: According to the 14 previous occurrences of this event omitting any repeat occurrences within 10 trading days, EventEdge® indicates that Nymex copper has shown a strong bullish edge that peaks 49 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the most recent occurrence of the event (Thursday, Nov. 1 2007) is Monday, Jan. 14, 2008.
Nymex copper rallies in 93% of the cases (13 of 14) by an average of 8.9% relative to the close on the event date. The one decline was 0.3%. The overall return of the 14 cases is 8.2%, which, based on the close on the event date, 335.6, provides a target price of 363.12.
If you would like to see more details of this historical edge, go to www.markethistory.com
Mickey Schoenhals is an analyst with Markethistory.com.
