Relief that the world has avoided a full-blown depression has turned into euphoria. The catastrophic collapse of some cyclical assets has been almost fully reversed. Shares in Antofagasta – a copper miner – are not that far off the highs they reached at the top of the bubble in 2008. This resurgence partly reflects the copper price’s new lease of life. The industrial metal rallied almost 140 per cent from its trough to its recent highs, although this is dwarfed by Antofagasta’s 236 per cent gain.

And even without an unlikely return to economic normality, it is possible to imagine circumstances under which the likes of Antofagasta would continue to prosper. During the 1970s, the mining sector generally beat the wider market when inflationary pressures were at their most rampant. So, if central banks trigger another era of spiralling prices, the miners would likely be among the more desirable holdings. But should economic growth and inflation remain subdued, miners will surely suffer.

So far, Antofagasta’s rally since last October has been even more powerful than its ascent during the bull market. However, it has a rather different feel to it. Previously, its price gains were smooth and accompanied by expanding trading volumes. The current rally has been characterised by whipsaw action and diminishing volumes. According to the Elliott Wave Principle, this is typical of the behaviour of a “flat” correction – a giant bear market rally.

Antofagasta has shown signs of fatigue lately, trading sideways for 11 weeks. It has also hit some obvious targets for a move of this type. However, it is too early to call the top. Not only can flat corrections retrace all their prior losses, but they can also exceed the previous high. Key levels to watch for a reversal include 794p, 878p or even perhaps 949p. Once the turn has occurred, the downside could be dramatic. At the very least, a return to 646p and 565p are likely. Ultimately, a revisit of 245p could complete the pattern.