Iron Ore: Momentum Builds, 200DMA in Sight
Iron ore futures have seen a decent rally over the past fortnight, rebounding from below $100 a tonne on strong volumes to take out downtrend resistance dating back to early December before going on with the move.
The price is now testing a zone that includes minor horizontal resistance at $102.25 and downtrend established in October when Chinese markets were rollicking along in peak stimulus mode. With momentum indicators firmly with the bulls, traders should be alert for a potential extension of the rally.
If we see the price push above this zone, longs could be established with a stop beneath for protection. The 200-day moving average looms as a potential target with $107.30 the next after that.
Take note of how poorly the price has traded above the 200-day moving average over recent months. As such, if the price action falters around this level again, those seeking the higher target may want to reconsider the merits of the trade.
Good luck!
DS
The price is now testing a zone that includes minor horizontal resistance at $102.25 and downtrend established in October when Chinese markets were rollicking along in peak stimulus mode. With momentum indicators firmly with the bulls, traders should be alert for a potential extension of the rally.
If we see the price push above this zone, longs could be established with a stop beneath for protection. The 200-day moving average looms as a potential target with $107.30 the next after that.
Take note of how poorly the price has traded above the 200-day moving average over recent months. As such, if the price action falters around this level again, those seeking the higher target may want to reconsider the merits of the trade.
Good luck!
DS
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.