Zinc May Advance to $2,736 a Ton, Commerzbank Predicts: Technical Analysis
By Nicholas Larkin - Oct 21, 2010 7:09 AM ET Tweet LinkedIn Share
Business ExchangeBuzz up!DiggPrint Email .Zinc may climb to $2,736 a metric ton after advancing above a resistance line and other key levels, according to technical analysis by Commerzbank AG, implying a 9.9 percent gain from the current price.
The attached chart shows the metal rose above a resistance line drawn from December 2006 and the 200-week moving average. The second chart shows prices gained above the 38.2 percent retracement of the 2006-2008 decline, one of the levels singled out in so-called Fibonacci analysis, and may advance to the April high of $2,550 and then to the January peak of $2,736.
“Zinc has maintained upside pressure following the break above the four-year resistance line and the 200-week moving average,” Axel Rudolph, a technical strategist at Commerzbank in London, said today in a report. The metal is “thus poised on reaching the $2,550 area,” and $2,736 “also remains in view,” he said.
Zinc for three-month delivery rose $49, or 2 percent, to $2,489 a ton at 11:33 a.m. on the London Metal Exchange. The metal, used to rust-proof steel, has slipped 2.8 percent this year, the only drop among the LME’s six main industrial metals.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that prices tend to drop or climb by certain percentages after reaching a high or low.
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nlarkin1@bloomberg.net.
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