Copper may be about to breakout. The $270 level was clearly defined resistance in late November and early December and on January 13th and 17th. Now that level may be breaking.
If it does I think it could rally to $300 because I don't see any clearly defined resistance until we reach that level. $300 was an important bottom in 2011, the summer of 2013, and most of 2014.
This dynamic can be played in the equity market by using COPX...the Global X Copper Miners ETF. It isn't exactly correlated but it is close enough to get the job done. It gapped up through resistance around the $23.25 level yesterday. A possible strategy would be to buy it with $23.25 as an initial stop out level. Sell it when Copper gets up into the $290s.
I'm going to buy COPX this morning after the open because it seems like the economy is starting to pick up some steam as the market trades at all-times highs, and this is Bullish for Copper.
Escondida copper mine in the Atacama Desert in Northern Chile is currently the world's largest copper mine by reserve. The mine contained more than 32 million tonnes (Mt) of recoverable copper reserves at the end of 2012.
Escondida is also the world's largest copper producing mine - in the financial year ending June 2013 output stood at 1.1 million tonnes (Mt), accounting for about five percent of global copper production.
BHP-Billiton operates the Escondida mine, holding 57.5% interest. Other stakeholders include Rio Tinto (30%), a Japanese consortium headed by Mitsubishi (ten percent) and the International Finance Corporation (2.5%).
The mine has been in operation since late 1990 and is currently one of the 10 deepest open-pit mines in the world. The reserve life of Escondida is estimated to be 54 years.
Copper concentrate is produced from sulphide ore of the mine through floatation. The mine also produces copper cathodes from oxide and sulphide leach ore. Sulphide ore comprises more than 82% of the mine's copper reserves.