Feb. 6 (Bloomberg) -- Tin, this year’s second-best performing base metal on the London Metal Exchange, is poised to form a so-called double bottom, which will help it advance to the highest level since 2011, according to Barclays Plc.
Tin may gain to $25,888 a metric ton next month, Dhiren Sarin, chief technical strategist for Asia Pacific at the bank, said today. That would complete the double-bottom pattern and push prices to $31,400, the highest level since May 2011, he said by phone from Singapore.
A double bottom is a pattern showing a drop in price, followed by a peak and then another drop to near the same level, followed by a rebound. Tin for three-month delivery was little changed at $24,950 a ton in London at 3:31 p.m. Singapore time. Prices have gained 6.6 percent this year, compared with nickel’s 9.4 percent advance.
“We expect there to be a surge of buying interest” when tin breaches the $25,888 level, Sarin said. “We’re waiting for that break before we turn more bullish.”
Prices climbed 22 percent in 2012, more than any other LME metal, after supply contracted the most since at least 2005. Shipments from Indonesia, the world’s biggest supplier, are poised to drop 24 percent to 75,000 tons this year, the least in a decade, according to a Bloomberg survey last month.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
--Editors: Ovais Subhani, Jake Lloyd-Smith