Karpel’s Corner: Copper ($JJC) lagging, bears trapped!

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and  never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

Earlier this month, I spoke about the move in the Base Metals ($DBB) sector, where there was a big move in Aluminum ($JJU) and Zinc ($ZINC) but the third leg of this base metal sector was lagging the turn to the upside — that would be Copper ($JJC).

I was getting bearish on the lack of upside in the Copper ($JJC) markets and, like others who were reading into this weakness, got trapped. Copper is now breaking out, and a base it’s safe to say is in place at $36.50 on $JJC. Anyone who was positioned to the downside is trapped. So, with mounting pressure with every tick to the upside, look for this base metal to continue to challenge to the upside.

One stock that is on the radar screen with all the momo in the Metals and Energy sectors is good old Freeport McMoran ($FCX). This is a company that produces roughly ~10 percent of the copper, has big exposure in oil and gas through an acquisition earlier this year, and with the Implied Volatility Rank Low ~10 percent and resistance not for another ~$3.5, watch for bullish opportunities.

See you next time at Karpel’s Corner!