Move over gold, copper is now breaking out, according to the charts. How to play it

It’s not just gold that has broken out – copper prices have also broken out on their chart, resolving a long-term basing phase to the upside after several months of backing and filling. The base breakout, above former resistance near $3.97/lb., supports a turnaround phase for copper and copper mining stocks, many of which have breakouts of their own. The Global X Copper Miners ETF (COPX) offers investors a liquid, cost-effective way to get broad-based exposure to copper mining stocks. The ETF is by far the largest copper-related ETF, with ~$1.52 billion in assets. COPX offers balanced exposure copper miners, with no one stock making up more than 6% of the ETF. It has an expense ratio of 0.65%, which is justified given the amount of international exposure required. Canada makes up the biggest percentage of the ETF at nearly 37%, and the U.S. is second with just above 10%. COPX has broken out from a long-term triangle consolidation pattern that goes back to early 2022. The breakout is a bullish intermediate-term development, targeting the 2021 high near $47.00. COPX shows no signs of upside exhaustion per our overbought/oversold metrics, suggesting near-term upside follow-through is likely in the wake of the breakout. The breakout in absolute terms is shared by a breakout in relative terms, noting the ratio of COPX to the S & P 500 has cleared the 200-day (~40-week) moving average. The breakout in the ratio supports intermediate-term outperformance from COPX relative to the broader equity market. The ratio has a trading range in place that goes back to 2021, however, supporting a neutral relative strength bias from a long-term perspective. A monthly bar chart of COPX suggests that a secular uptrend is in place above the monthly cloud model, which is the shaded area on the chart. The recent breakout is associated with a bullish upturn in the monthly stochastics, which suggests that the monthly MACD (moving average convergence/divergence) is likely going to shift back onto a “buy” signal for the first time since 2020. Improvement in the monthly indicators suggests that copper and COPX’s triangle breakouts have bullish long-term implications. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. 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