Copper (HG.FUT)

Short term

Copper is in a falling trend channel in the short term. This shows that investors over time have sold at lower prices to get out of the future, and indicates negative development for the future. The future has support at 4.00 and resistance at 4.24. Negative volume balance indicates that volume is high on days with falling prices and low on days with rising prices, which weakens the future. The future is overall assessed as technically slightly negative for the short term.

Recommendation one to six weeks: Weak Negative (Score: -50)

Medium term

Copper has broken through the floor of a rising trend channel in the medium long term. This indicates a slower rising rate at first, or the start of a more horizontal development. The future has met the objective at 4.30 after a break of the rectangle formation. The price has now fallen, but the formation indicates further rise. The future has support at 3.96 and resistance at 4.64. Negative volume balance weakens the future in the short term. The RSI curve shows a falling trend, which could be an early signal of the start of a falling trend for the price as well. The future is overall assessed as technically neutral for the medium long term.

Recommendation one to six months: Hold (Score: 8)

Long term

Copper shows strong development within a rising trend channel in the long term. Rising trends indicate that the future experiences positive development and that buy interest among investors is increasing. The future has met the objective at 4.73 after a break of the rectangle formation. The price has now fallen, but the formation indicates further rise. The future is testing support at 4.00. This could give a positive reaction, but a downward breakthrough of 4.00 means a negative signal. Negative volume balance indicates that volume is high on days with falling prices and low on days with rising prices, which weakens the future. Trading volume has increased substantially lately. This shows there is an increased interest for the future, possibly because of fundamental news. The future is overall assessed as technically positive for the long term.

Recommendation one to six quarters: Positive (Score: 78)

Investtech’s analyses focus on a stock’s trend status, short term momentum and volume development. These are central topics of technical analysis theory that describe changes in investor optimism or fluctuations in a company’s financial development. However, Investtech’s strong focus on these elements is due to research results that clearly indicate causation between these factors and future return on the stock market.

Trend

Theory: Stocks in rising trends will continue to rise.

Psychology/economy: Rising trends indicate that the company experiences positive development and increasing buy interest among investors. Read more

Research: Stocks in rising trend channels in Investtech’s medium long term charts have been followed by an annualized excess return of 7.8 percentage points compared to average benchmark development. This is shown by Investtech’s research into 34,880 cases of stocks in rising trends on the Nordic Stock Exchanges in the period 1996 to 2015.
Read more about the research results here

 

Momentum

Theory: Stocks with rising short term momentum will continue to rise. Stocks with very strong momentum (overbought) will react backwards.

Psychology/economy: RSI above 70 shows strong positive momentum. The stock has risen in the short term without any significant reactions downwards. Investors have kept paying more to buy stocks. This indicates that more investors want to buy the stock and that the price will continue to rise. Read more

Research: Stocks with strong momentum have on average continued to rise, and more so than the average stock listed on the Exchange. This is shown by Investtech’s research into 24,208 cases of stocks on the Nordic Stock Exchanges in the period 1996 to 2015 where RSI went above 70 points, indicating strong and increasing short term momentum. On average, annualized, the stocks rose the equivalent of 11.4 percentage points more than the average stock.
Read the research report here

 

Volume

Theory: Rising prices on high volume and falling prices on low volume indicate strength in a stock. Volume can confirm a rising trend or signal that a falling trend is ending.

Psychology/economy: When investors very much want to buy a stock, they have to increase the price to find new sellers. Rising price on high volume shows that some investors are so aggressive that they push the price up to be able to buy the stock. Investtech’s Volume Balance tool measures the relation between price rise and volume and measures investor aggression at rising and falling prices. Read more

Research: Stocks with volume balance above 40 have been followed by an average annual return of 4.7 percentage points on the Nordic Stock Exchanges, shown by research conducted by Investtech into 24,580 cases.
Read the research report here

 

Investtech's analyses

Investtech has combined theory, psychology and research into powerful investment tools.

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Investtech are behavioural finance and quantitative stock analysis specialists. The company sells analysis products to private, professional and institutional investors. Investtech manage the AIFM company Investtech Invest, which invests customers’ funds in the stock market.

Investtech’s computers analyze more than 28,000 stocks from 12 different countries every day. The analyses are presented in eight languages and sold to customers worldwide. In addition to the automatic analyses, the company’s analysts present subjective assessments and recommendations for some markets. The analyses are available to customers in the form of daily morning reports and cases, and weekly market updates and model portfolios.

Investtech’s algorithms for analysis, ranking and stock recommendations are based on research dating back to 1993. Part of the research was conducted in cooperation with Oslo University and the Norwegian Research Council. Research still has high priority for Investtech. Many of the company’s research results are available for customers on the company’s web site.

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