China Buying Copper (Chart)

China is on a buying spree in copper. China State Reserves Bureau bought up 329,000 tonnes of copper in February and 375,000 tonnes in March. This explains in part the 70% surge in copper prices since the lows were made in December.

There is saying in copper -- buy on Thanksgiving, sell on Easter. Worked pretty good this year. Although, it was a little hair raising from Thanksgiving to the December low.

China has also been a big buyer of metals like aluminum, nickel, zinc, and tin.



Chart Notes:

• Copper was overbought at the rally highs.
• Copper traded above the red line (two standard deviations above the mean) and was due for a correction.
• The market is currently testing the green line and 2.00.
• The trend is up and the short, intermediate, and long term averages are all pointing up.
• First support is around 2.00 and major support is in a band from 1.80 to 1.90.
• Resistance is at the current highs around 2.23.
• Technicals point to higher prices.

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Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

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Copper Soaring, China Buying (Chart)

Cash Copper, Daily Price Mark



The chart contains a single price (dot) for each trading day.

Notes:

• The price of copper is moving up fast. This is being caused by buying out of China.
• China is a large importer of cooper. They import about 85 percent of their need.
• On December 24, copper traded at the low price of 124.75.
• Today the price was marked at 212.55.
• The price of copper has risen 70 percent in the last 4 months.

You should be looking at Freeport McMoran (FCX). Freeport benefits from rises in the price of copper. The company is also a large producer of gold. We will cover Freeport McMoran tommorow.

You should note the effect that demand from China can have on commodity prices. One theme that should become evident is that when China starts to demand the supply of a commodity its price is likely to rise dramatically. This will create lots of opportunites for smart investors.

There are several ways to take advantage of thirsty demand for commodities from China. These include: sector stocks, ETFs, options, and commodity futures contracts.

We will be honing in on these opportunities in the days and weeks ahead.

So stay tuned daily.

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Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

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