Over the spring, Teck Resources (TECK.B.TO) remained under accumulation but its upward momentum slowed relative to the fall and winter. This month, the shares have turned decisively downward. A spread double top breakout failed after one row, a Bearish Bull Trap reversal. Since then the shares have been steadily retreating, falling from near $55.00 toward $40.00, taking out $50.00 along the way and completing bullish Double Bottom and Spread Double Bottom breakdowns, all combining to signal the start of a new downtrend.
Based on a combination of vertical/horizontal counts and previous column highs/lows, next potential downside support on trend appears near $38.60, $32.95, and $31.00. Initial resistance appears near $43.45 based on a 3-box reversal and then $45.20 based on a retest of a recent breakdown point.
With its bearish SMAX score decreasing to 3, TECK.B.TO is exhibiting weakness against the asset classes.
This 2% chart highlights the severity of the current downturn in copper (HG.F). About a year ago, a big rally up out of the March 2020 market bottom came to an end and the metal price settled into a sideways trend. As recently as March of 2022 it was still reaching new highs, but in recent weeks, the price had been weakening.
This month, copper has collapsed, completing a series of bearish Double Bottom, Spread Double Bottom and Spread Triple Bottom breakdowns. Copper also has taken out what had been key channel support near $4.00. All these bearish signals combine to indicate that a new downtrend has started.
Most troublingly, Copper’s breakdown could have much wider implications. Known as Dr. Copper, the yellow metal is widely considered to be one of the markets most sensitive to the health of the world economy. Just as the price soared in 2020 when government/central bank stimulus boosted the world economy, this copper price collapse suggests the world economy could be falling into a recession. Metal stocks have already been dropping off a cliff along with copper, but this selloff could have wider implications across many sectors as we move into the summer.
Based on a previous breakout point and then a horizontal count, next potential downside support for copper appears near $3.28, then $3.15. Initial rebound resistance appears near $4.00 where a round number and a recent brewakdonw point align.
With a bearish SMAX score of 3, HG.F is exhibiting weakness against the asset classes.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.