Copper Futures Consolidate as Equities Rise

Copper prices showed a slight gain on February 18, 2009, as equities made modest gains, halting a previous day's slide. The metal remained in a consolidation phase that began at the start of the year. Rob Kurzatkowski, a futures analyst with optionsXpress, noted that traders were following the equity market's upward movement after a sharp sell-off the previous day. The lack of clarity about government economic and bank-bailout plans had been hurting markets.

Key Takeaways:

Copper futures settled 1.10 cents higher at $1.4535 per pound on the Comex division of the New York Mercantile Exchange in May.
The stock market rose modestly, with the Dow industrials increasing by around 22 points and the March S&P 500 futures up by 3.90.
Traders see a better equity market as an encouraging sign for the economy, which benefits copper prices.
The recent consolidation in copper is ongoing, with the May futures holding above support around $1.40.
If the market fails to hold above $1.40, it could retest December lows below $1.30, including the Dec. 26 contract low of $1.2710.
Minor resistance is near the $1.55 level, with more substantial resistance around $1.65.

Statistics:

May copper futures settled 1.10 cents higher at $1.4535 per pound.
The Dow industrials increased by around 22 points.
March S&P 500 futures rose by 3.90.
January housing starts declined 16.8% to an annual rate of 466,000.
January industrial production fell 1.8%.
Capacity utilization slid more than forecast to 72%, compared to a consensus estimate of 72.3%.
Inventories of copper stored in London Metal Exchange warehouses fell 1,125 metric tons on Wednesday.

Sources:

Dow Jones Commodities News via Comtex
Allen Sykora, Dow Jones Newswires; 541-318-8765; allen.sykora@dowjones.com
Dow Jones Newswires 02-18-09 1350ET