We covered extensively the copper price and copper miners in October, but decided to give the copper market a little bit of time to choose a direction. Right now, copper is at a point where it will start trending pretty soon. We don’t know which direction it will go, but it will become either a huge breakout or a painful breakdown.

The reason we are convinced that this is the moment of truth is based on the chart pattern of the copper price. Watch the following chart, specifically the purple circle. A couple of observations:

• The copper price rallied strongly in October and November, but stalled right resistance of a long term bearish trend channel.
• Contrary to the past, it is trading around the same price point for several weeks now. In all previous instances, it went downhill after reaching secular resistance. This suggests a strong fight between bulls and bears, at a very important price point.
• For now, bulls hold the benefit of the doubt, as the price is slightly above resistance.

In other words, the current price of utmost importance. That is an important insight for investors, as most investors cannot identify the price points that really do matter. As said many times before, only a minority of price points on a chart have a meaning, the majority of is worthless.

We have to wait just a little bit more to get a confirmation of a breakout. Until then, there is no certainty about a future price direction, it can go both ways. In case copper goes higher from here, it is a meaningful breakout, and lots of money will flow to the copper market.

In case copper breaks out, investors should look to buy copper miners like Freeport McMoRan (FCX). We discussed FCX before, and showed the following chart. Basically, nothing changed in recent weeks, and our conclusion annotated on the chart is still very accurate. Uncoincidentally, FCX stalled right at the bottom of January 2015. Former support is now resistance.

If the price of copper moves higher from here, we have a secular breakout, and FCX will move at least to $24 in a short period of time. Of course, that is a big IF.