The covid shock has translated into a broad convergence, with all metals in the industrial complex trading in line with the commodity demand indicator of TD Securities.
Key quotes
“All metals in the complex exhibit a strong downtrend more than 50% of all technical indicators (both mean-revering and momentum) are short for every metal in the complex.”
“Some granular divergences can be observed, with copper, aluminium, and zinc exhibiting a weakening downtrend while nickel and lead’s downtrend continues to strengthen.”
“We think it is more likely that the recent strength observed in prices has been driven by profit-taking, synonymous with a bear market rally, and does not imply a change in trend for the complex. Nonetheless, the aggregate breadth of signals remains firmly tilted towards the shorts across the complex.”
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