Financial market research and analysis

Glencore is gaining a bit of colour after last week’s dip to the historical low share price of 66.70p on no particular news. Earlier this week, news on a potential sale of its agricultural unit has been the trigger for correction and brought some investors back on the deck. Glencore is approximately 12% higher since the beginning of the week and there is room for further recovery.

On weekly basis, Glencore has not even stepped out of the oversold territory yet; the RSI points at 28%. On daily basis, demand has been balanced at the first half of the week and the relative strength index is around 50% signalling that the buying interest is not exhausted despite four straight session of consecutive recovery.

The 125.5p is a critical weekly level, it is Fib 23.6% level on May-October sell-off.

Bullish case: If 125.5p surpassed, an advance to 145p (the 50-day MA) could be a reasonable upside target. Note that, Glencore will still be considered in a bear market below 185p, meaning that unwinding business units should not place 140-150p target fundamentally under pressure.

Bearish case: failure to clear 125.5p could cause a setback to 100p mark.