Comex High Grade Copper Price Futures (HG) Technical Analysis – Attempting to Grind Through Series of Former Tops at $3.3055 to $3.3580

March Comex High Grade Copper futures hit a four-year high on Thursday. The move was driven by aggressive fund activity. They continued to buy strength despite the multi-year high amid strong demand in top consumer China and supply disruptions in top producer Chile, leaving the market short of the metal used globally in power and construction.

The main trend is up according to the daily swing chart. The market is now trading inside a major resistance zone made up of a number of old tops from 2013, ranging from $3.3055 to $3.3580. Due to the nature of these tops and the aggressive fund buying and despite the bullish upside momentum, investors have to tread carefully inside this zone due to extremely thin holiday trading conditions.

At this point in the rally (up 16 days from the December 5 bottom at $2.9430), investors have to start assuming they are buying a top and adjust their risk parameters accordingly. You want to try to avoid getting caught in bull trap.

This type of rally tends to end with a massive spike to the upside and a lower-low, higher-close, also known as a potentially bearish closing price reversal top.

A sustained move under $3.3055 will be the first sign that the selling is greater than the buying at current levels.

Crossing over to the strong side of an uptrending Gann angle inside this zone at $3.3350 will indicate the buying is getting stronger.

Overtaking $3.3580, the June 5, 2013 top, with conviction, could launch an acceleration to the upside with the March 27, 2013 main top at $3.4440 the next major upside target.