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Antofagasta’s rally loses momentum

It was a reasonable month for February for Chilean copper miner Antofagasta, but it looks as if the company’s rally has run its course.

Results next week from Antofagasta are likely to show that further difficulties are in store for the company. Today’s Chinese trade balance data was not what the struggling mining sector needed, and the mining giant has been hit along with everyone else.

On an hourly chart, we can see that the situation looks bleak. The 50- and 100-hour moving averages are moving lower, with the former having already broken below the 200-hour (a distinctly bearish sign) and the latter beginning to cross over the 200-hour on the downside too.

One consolation for bulls is that the shares are now oversold on an hourly chart, which might imply some tentative buying. In addition, the shares have held at the top end of the gap created in late January, around 858p, which implies a degree of support.

If this level breaks however, we could be looking at a test of the bottom end of the January gap; around 827p, some 30p below the current level.  

Antofagasta chart

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