Yesterday, we shared our bullish stance on Freeport-McMoran stock. But of course, Freeport-McMoran is pretty much a pure copper play. Therefore, in order for the stock to climb, the price of copper must climb, as well. Similarly to Freeport stock, the price of copper rose between 2016 and 2018 and has been declining for the past two years. However, the chart below shows that expecting a rise in XCUUSD now is not without merit.
The most important thing is that XCUUSD seems to have formed a complete 5-3 Elliott Wave cycle, as well. Wave I/A up to $3.2978 is a five-wave impulse, labeled (1)-(2)-(3)-(4)-(5). Wave II/B is a simple (a)-(b)-(c) zigzag, where wave (c) is an ending diagonal.
According to the theory, this means more strength can be expected in wave III/C going forward. The fact that a bullish reversal occurred from the 61.8% Fibonacci level further supports the positive outlook. Currently near $2.75, the price of copper has plenty of room to run as wave III/C must exceed $3.30. Curiously, just as the global economy is slowing copper seems ready to shine after two years in the doldrums.
Similar Elliott Wave setups occur in the Forex, crypto and stock markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!
