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Copper futures contract traded on the Multi Commodity Exchange (MCX) has shot up over one per cent in the past week. Strong US housing data released last week and improved Purchasing Managers’ Index release from China has boosted the sentiment in copper.
The outlook for the MCX-copper futures contract is bullish. The contract has decisively breached its important ₹420-421 a kg resistance zone.
This zone will now act as a good resistance-turned-support zone for the contract.
Intermediate declines to this level could attract fresh buying interest in the market. A reversal from this support zone will have the potential to take the contract up to ₹433 in the coming sessions.
Short-term traders can use such declines to initiate fresh long position in MCX-copper at ₹423.
Stop-loss can be placed at ₹418 for the target of ₹431.
Key short-term resistances for the contract are placed at ₹433 – the 50 per cent Fibonacci retracement level and at ₹434 – the 200-day moving average level.
The bullish outlook will get negated if the MCX-copper declines below ₹420.
The ensuing target on such a break will be ₹415/kg.
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