Lumber prices prepare for a strong breakout from a 2 year-long consolidation. Since the beginning of 2013, prices have been consolidating in a contracting range with the boundaries now standing at 360 and 300 levels. Latest rally towards the upper boundary suggests prices are likely to challenge the strong resistance in the following days/week. A decisive breakout above 360 levels will be positive and will target 400 levels in the short/medium-term.
In December 2012 we have seen Lumber price clearing the strong horizontal resistance at 330 levels. Breakout was followed by a sharp rise towards 400 levels in less than two months. Since March 2013, Lumber has been pulling back to the previously broken support/resistance area. Price should find support between 330 and 340 levels and rebound once again. The lower boundary of the last one year’s uptrend, 200 day moving average and horizontal trend line are all forming support between 330 and 340 levels.
