Copper futures traded on the Multi Commodity Exchange (MCX) witnessed a sharp rally in the past week. The contract rose over 3 per cent last week and recorded a high of ₹375.3 a kg on Monday.

Though the contract has reversed lower from this high sharply, the support at ₹363 has held and the contract is bouncing back once again. It is currently trading near ₹368.

The outlook remains bullish and there is no danger for any sharp fall as long as the contract trades above ₹363. An immediate rise to ₹373 and ₹375 looks likely . A strong break above ₹375 can take the contract further higher to ₹380.

Traders with a short-term perspective can go long at current levels. Stop-loss can be placed at ₹362 for the target of ₹378. Intermediate dips to ₹363 if seen can be considered to accumulate long positions.

The downside pressure on the contract will increase if it breaks below ₹363. The contract can then target ₹360 which is a key short-term trend line support for the contract. The 21-day moving average is also poised at the same level of ₹360. This makes a very strong support level and break below this level looks unlikely at the moment. Having said this, the uptrend that had begun in late January will remain intact as long as the contract trades above ₹360.

The short-term outlook will turn bearish only on a strong break below ₹360. Such a break can drag the copper futures to ₹352. The possibility of such a sharp fall looks unlikely on the charts.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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