Housing starts have averaged 761,000pa in the US over the past 6 months. That’s up a healthy 24% on the 612,000 starts in 2011. New dwellings are a major source of demand for copper and with China’s economic growth showing signs forming a base around current levels, the demand outlook for copper appears to be improving. This makes its arrival at trend line support look interesting.
A rally off the trend line here, would confirm the large triangle scenario shown by the 2 trend lines on the chart.
A strategy approach to this situation could be to buy if price shows more definite signs of rejecting the support e.g. a close above the candle that touched the trend line. This is the entry trigger shown on the chart.
A logical place for the stop would be just below the low at the support line while the triangle resistance could be used as a profit objective