RE:Copper Rally Could Give Stocks Breathing Room But the pattern in copper itself shows something very interesting – and possibly bullish in the short-term. Since falling sharply in November to seven-year lows, the metal stabilized and now appears to be completing an inverted or upside-down head-and-shoulders pattern (see Chart 1)
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This common pattern suggests a transition phase from bear to bull as declines weaken and bounces strengthen. Technical momentum indicators confirm this by setting higher lows even as prices set lower lows. In charting lingo, that is called a bullish divergence. And price typically changes direction to follow the indicator.