Steel and industrial metal plays rocketed to multi-month and multi-year highs in December, posting their strongest gains of 2017 in reaction to copper’s rapid ascent to a four-year high. This bullish action bodes well for 2018, but major instruments are now overbought and in need of consolidation that shakes out weak hands while setting the stage for additional upside in the coming months.
Higher inflation expectations are driving this dramatic uptick, along with rising optimism that the White House and Republican Congress will soon pass a massive U.S. infrastructure package. Bullish Chinese GDP data are adding to this harmonic convergence, raising the odds that deep 2016 lows marked cyclical bottoms ahead of long-term uptrends that could eventually reach new highs. (See also: Beyond Gold: Top Picks in Industrial Metals.)
Industrial metals plays rocketed to new highs in December but are now overbought, raising the odds for multi-week pullbacks. …read more
Read more here: Wait For Pullback to Buy Red-Hot Metals
Category: XME, FCX, X