The rally in copper prices that has been in place since the beginning of this year seems to be losing steam. The Copper Futures Contract, which trades on the Multi Commodity Exchange (MCX) touched a high of ₹840.95 per kg last week and then came down from there. It is currently trading at ₹828 per kg.
Outlook
The fall below ₹830 is a negative. It indicates that the MCX Copper could have hit an intermediate top. As long as the contract trades below ₹830, the near-term outlook is bearish. A corrective fall to ₹817 or ₹815 is possible soon. Clusters of moving averages are present in this ₹817-₹815 region. So, a fall below ₹815 is less likely.
If the Copper Futures contract bounces from the above-mentioned support zone, the bias can turn positive. That will keep the short-term uptrend in place since the beginning of this year. So, this leg of the up move can take the MCX Copper Futures contract up to ₹845-₹850 in the coming weeks.
If the contract breaks below ₹815, an extended fall to ₹810 can happen. As such, the price action in the ₹817-₹815 region will need to be closely watched..
Trade Strategy
Traders can wait for dips. Go long only if the MCX Copper Futures contract bounces back from the ₹817-₹815 region. Keep the stop-loss at ₹808. Trail the stop-loss up to ₹822 as soon as the contract goes up to ₹826. Move the stop-loss to ₹832 when the price touches ₹836. Exit the long positions at ₹840.
