The Basic Resources and Metals space has lately been a punch bag. Prices on copper, gold etc as well as stocks in the sector have been going one way only over the past weeks, sharply lower.
This is not a call to jump all in long here, but several of the metals are trading at big support levels. The related stock indexes are also trading at support levels.
3 month rolling Copper contract is at levels from where we have seen the metal reverse off and put in violent bounces higher.
Gold has been a dog lately as well but is approaching big levels.
The SXPP Index (Euro Stoxx 50 Basic Resources Index) trades right at the 200 day average and the longer term trend. After the recent fall these levels should provide some support. We saw a similar set up earlier this year in March.
Volatility of the SXPP Index has already shot up a lot. Chasing protection here is expensive.
The XME US (US Metals and Mining ETF) trades at the 200 day average as well and is at the longer term trend.
It is easy to get carried away with all the negative trade war China news but many of these assets have come down a lot and could be setting up interesting bounces higher shortly.
Source: all charts by Bloomberg
