Lumber prices on the rise, as fourth quarter rally looks to be taking shape

Lumber enjoyed a strong week just gone, with prices rising back towards the key $811 resistance level. From a wider perspective, we can see how the past three months have brought about an impressive 73% gain for this market.

The seasonality chart highlights how this rally could pave the way for another big year-end recovery for lumber.

With price having slumped in May-August, we have seen price set up for a potential repeat of the average trajectory seen over the past 20-years. That chart points towards a particularly strong fourth quarter, with November and December providing major upside in the past.

The finer details highlight how the 26% gains seen so far this month put us on track for yet another bumper November.

Thus far, we have seen a 75% hit rate for that month. Looking towards the December data, it is less reliable at 60%.

However, that does represent the joint second highest hit rate of any month (alongside January). That points towards November-January historically being the most reliable three-month period for Lumber.

Coming back to price itself, we can see price rising back into the $811 resistance level, with a break through that level bringing about a fresh buy signal. A break back below the $622 level would be required to negate that bullish view.