Back on March 2, I wrote a bullish piece on copper and detailed that the price had stabilized and that the bearish sentiment was over the top at that time. Copper has rallied nicely since then, so I thought it would be a good time to update you on my view.
Looking at the chart of the Commitment of Traders on copper, we can see that some of the bearish sentiment has been burned off, but it still has a long way to go. So far the large speculators have gone from having a net 27,000 contracts shorted to having 19,000 short contracts. This barely gets the net short position above the 22,000 shares that were being held short during the last bottom in 2006.
We have seen the price of copper rise from $1.25 to $2.10, but from the looks of the sentiment towards copper, the bull market in copper is far from over. I would think as long as the COT shows a net short position from large speculators, there is room for copper to rise and we could see copper over $3.00 again before the end of the year.
Inspired by his high school economics teacher, Rick Pendergraft fell in love with the markets at an early age. He entered his first investing competition at 17, and opened his first brokerage account before he finished college. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide.
After a ten year career in banking, Rick decided to pursue trading full-time. To get his foot in the door, he started out in the sales department at Schaeffer’s Investment Research. It was not long before his talent was recognized and he was invited to apprentice under Bernie Schaeffer, one of the top options traders in the world. Rick thrived in his new position and twice received the award for “Top Trader.”
Rick has developed a loyal following of readers who are grateful for his timely warnings and profitable advice. He is widely recognized as a market expert and has been frequently quoted by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and the Washington Post. Rick’s primary focus is on identifying short and intermediate term rising and falling trends in the major market sectors. His analysis is based on technical factors along with indicators of market sentiment
Rick is currently the Editor-in-Chief of The Velocity Strategy. He lives near Delray Beach, FL with his wife and three children.
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what is the best and safest way to play copper now
thanks