Copper stocks and KAZ - When will the nightmare end?

Monday, 5th August 2019 12:56 - by Rajan Dhall

Base metals stocks have not had the best time of late as the trade war between China and the US intensifies. Copper in the COMEX futures exchange is now trading at USD 2.55/lb a 9% fall since the highs seen on the 19th July. Just over the last 5 sessions, Donald Trump added another 10% worth of tariffs to yet more Chinese good now leaving it at 97% of all goods imported into the US from China are now being tariffed. But China retaliated yesterday with all state-owned companies now stopping all imports of American agricultural goods. All of this action led copper to sell-off overnight again to the levels mentioned above. 

Kaz Minerals is one stock I personally monitor and they have been hit pretty hard as the price of copper continues to fall. Now we are at a critical level in copper as the price is at the long term consolidation support on the weekly charts I thought it would be good to evaluate support levels for Kaz. Looking at the weekly chart below Just recently a long term support trendline was broken on average volume it must be said. Now below the 500p mark there are two key supports at 425p and 348p respectively. The support lower down is the stronger one and was used as a key resistance level in 2014 but we must see how price reacts at 425p first and if the copper rout slows down it could be interesting. Lastly keep an eye on volume levels down there as this break has hardly been conclusive is there is any kind of rejection and it comes with a lot of support from the market that will compound the view that the stock is oversold.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.