On Thursday, the Glencore share price posted its best one-day performance since May, following a sharp rebound in Chinese property stocks.
Glencore (LON: GLEN) got a much-needed boost on Thursday, as shares of Chinese builders surged in Hong Kong. Mainland developer Sunac rose 8.4%, while the Logan group added 9.5% on signs that Beijing will ease policies to reduce stress in the struggling sector. As a result, the miners share price closed at its highest price this month as investors wagered improving sentiment at the world’s largest consumer of raw material could provide a considerable tailwind moving forward.
The Glencore share price has performed well this year due to rising commodities prices. However, the fallout from China’s bond market has weighed down the price in November. Nonetheless, GLEN has gained +56.48% year-to-date and almost 240% from the 2020 pandemic low. Furthermore, despite retreating 12% from the October high, the share price remains in a long-term uptrend.
The daily chart shows GLEN bounced from the support of the 50-Day Moving Average on Thursday, finishing the session at 370p (+4.12%). As a result, the Relative Strength has turned higher, indicating the bullish momentum is increasing. As long as the share price maintains the 50-DMA, it should extend towards long-term trend resistance at 408p, printing a three year high in the process.
Of course, there are no guarantees that China’s bond market is over the worst. Furthermore, we should take the rumours with a pinch of salt until an official announcement. Therefore, my current view is ‘cautiously optimist’ with a 408p price target. However, the bullish call relies on GLEN remaining above the 50-DMA. Therefore, a close below 352.90p invalidates the view.
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This post was last modified on Nov 12, 2021, 05:00 GMT 05:00