In terms of seasonality, the equity clock chart shows us that base metals – illustrated by the BMO equal weight global metals ETF – tend to be positive into the year end, take a break in January, then carry on for a final kick into the spring.
Despite the seasonally positive tendencies at this time of the year, I’d suggest that anyone wanting to play the sector hold off at this time.
The chart of ZMT shows us a fairly significant level of overhead resistance at this point. So too does the non-equal weight index ETF for the sector by iShares – shown below.
I’d wait for a breakout through the wall of resistance on these charts – or for a number of the major the individual stocks in the sector such as TECK and FCX. I’ve marked their resistance points on the charts. Such a breakout on the sector charts, and the individual components within the sector would be technically bullish.
Link to Keith’s BNN MarketCall show on Friday can be accessed here.
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