wake up..its on..breakout!

Copper finally burst past US$1.55 on friday night which strongly indicates imo a significant rally above the current lows is beginning.

Following complete breakdown from ~US$4 mark copper has been stuck below US$1.55 since December last year. The December lows also held through January.

US$1.65 is the next target followed by US$1.90 then possibly a test of the 200dma currently at US$2.74. Definite opportunity to buy current producers at or near 12 month lows if this plays out.

Volume patterns and in FCX Looking at ~US$32 on FCX (freeport) to confirm this leg up.

The rising copper price should also drag Nickel, lead and zinc higher from their respective lows, especially zinc since a significant amount of production has been cut and almost no producer is making money here. for local producers.

Favour mid tier and small producers with low to moderate cash costs as they are already at or close to lows and input cost have fallen. Need to monitor aussie dollar as may yet stiffle gains.

Re-entered the following producers today at the following prices;

EQN $2.14
Production from lumwana copper mine
Expected 170kt this year @ US$1.15 cash costs

JML $0.11
Small copper/zinc producer from new mine, paying down debt.
~US$40c cash costs Zn eq
Recent new VMS discoveries around Jaguar mine

ABY $0.145
Problematic Nifty producer
High cash cost could see significant rise
Higher risk than others

TZN $0.355
Zinc,lead production from Agnus mine
Cash flow positive, forecast US$40c/lb Zneq
Tala Hamza is an elephant in the making.

Other producers to look at:

BHP RIO copper
CBH PEM KZL copper zinc lead
PNA copper gold
WSA MCR IGO MBN nickel
ALB MRE nickel (CF negative)
HIG possible nickel production from PNG

CFE aquired CUO assets (includes 30kpa copper production) at what could be the bottom in copper and PGM markets.

Expect CBH and PEM to outperform if Zinc in aus dollar terms

Looking at BWR and Lundin for the tsx people. My preferred silver lead zinc company SVM went up 19% on friday, strong gains in BWR, Lundin and others as well.

Following asx explorers to look at

CDU EXS IVA MLM BOC IRN
Many others

Also entered mining service provider EHL last week at 17c, BLY is another to consider.

Toppish US$ is also big factor in copper market with positive implications for gold and silver prices. Dollar has failed to break $86 3 times in the last 2 weeks and could easily fall back to 200dma at 79 short term.

Comments welcome,

http://www.kitcometals.com/charts/copper_historical.html
http://www.kitcometals.com/charts/zinc_historical.html
http://www.kitcometals.com/charts/nickel_historical.html
http://quotes.ino.com/chart/?s=NYBOT_CR
http://quotes.ino.com/chart/?s=NYBOT_DX
http://stockcharts.com/h-sc/ui?s=%24copper