A US government report released yesterday showed that new equipment orders rebounded in November. Capital goods orders rose by 0.7%, showing the strongest monthly growth over the past year.<\/p>
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The value of core capital goods orders, a proxy for investment in equipment excluding aircraft and military equipment, increased last month after a revised 0.1% decline in October.<\/p>
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The rise in orders may be just the beginning, as companies are more comfortable now that the election is past and are making long-term investments. The report showed growth in orders for machinery, computers and primary metals.<\/p>
Another sign of optimism came earlier this month, when a gauge of new orders moved into expansion territory for the first time in eight months, according to the Institute for Supply Management’s November manufacturing survey.<\/p>
If one looks at the situation with new orders in the longer term, from several months to a year, the picture will not be optimistic. Decrease is noted in all groups of orders, somehow related to metals: automobiles and spare parts, transport equipment, construction vehicles, electrical equipment, industrial equipment, etc.<\/p>
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From a technical point of view, copper prices are now in a multi-month support zone in the range of 8800\u20138900. For those traders who accept the scenario of a possible upward reversal of copper prices, it gives an opportunity to open short positions, which will provide the best ratio of potential risk to profit.<\/p>
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The overall recommendation<\/strong> is to buy copper.<\/p> Profits should be taken at the level of 9150. A Stop loss could be set at the level of 8800.<\/p> The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.<\/p>
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