TCKRF - Will Copper Enter a Structural Deficit? | Benzinga
Source: Michael Ballanger 04/30/2024
Michael Ballanger of GGM Advisory Inc. shares his view on the current state of the copper market and shares some copper stocks in his portfolio.
While I was dabbling in the Li and U3O8 trades, I was quietly but steadily accumulating a basket of juniors that were not considered to be seen as "trades" but rather long-term positions with either excellent projects or discoveries and all of them are now fully funded and awaiting the commencement of drill programs in the hunt for or development of the one metal that is used universally the world over — copper.
I told subscribers in late 2022 that the two metals for the decade were copper and gold, with copper being the comprehensive answer to the electrification movement as whatever else happens with the establishment of new energy sources (like nuclear's revival), the current global transmission grid would need to be expanded to accommodate all this new electricity being pumped out of all these new modular nuclear reactors.
Then, along comes another Millennial narrative called "artificial intelligence" and as the mania of the decade fixes its grip on the investment world, they suddenly realize that all of this new computing power brought about by "AI" will require a boatload of additional electricity to power all of those new computers that will allow kindergarten kiddies to compose operatic symphonies with their iPhones driven by the magic of "AI"!
At this point in the weekly missive, I draw your attention to the earlier part where I spoke of an "epiphany of sorts" and that I was forced to "pinch myself" rather than revel in the glory of the 2024 performances of my two favorite metals. I would draw your attention firstly to copper, which just took out the June 2022 high at $4.57 while sporting a near-vertical ascent during the past month. It is now sporting an RSI at around 75, and while there is still a MACD "buy signal" in place, a couple of corrective days could trigger a reversal.
Up until mid-February, the ascent in copper had been gradual, but since then, the rise has moved to vertical. As I have written countless times, "any market whose trend moves from gradual to vertical is approaching a reversal of the prior trend."
So, copper is now overbought and in full vertical regalia, which means ...