Sell Signal – Copper

On August 8, 2022, my writings about a low in the Copper price hinted at how investors could take participate in that view.

One stock that I favoured for various reasons (including being a beneficiary of a low Chilean peso) was to accumulate the equity of the Chilean copper mining company, Antofagasta

The listed London securities touched GBP 10.00 in the weeks preceding the publishing of that note, which was when clients received the buy advice. Below GBP 11.00 remained fertile ground to acquire the shares.

But there are times when I sell.

Beyond the subjective observation of the price action resembling a parabola coupled with a 63%+ advance within 6 months……….

Last week, Antofagasta simultaneously registered to a weekly Overbought reading, traded up to 2.5 standard deviations above its rolling weekly mean and its price was greater than 50% above its 200 Week Moving Average.

This moment was triggered at any price above GBP 18.00

Then I take a look at correlation between Antofagasta’s stock price and that of Copper. This is shown in the next chart.

This should prompt readers to ponder the correlation, effect and representation the price of Copper has with Equities, Oil, GDP and Interest Rates.

Indeed, there are times when to sell.

January 20, 2023

by Rob Zdravevski

rob@karriasset.com.au

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