Copper futures traded on the Multi Commodity Exchange (MCX) witnessed a bullish break out above ₹390/kg last week as expected. The contract has surged over 8 per cent last week breaking and decisively closing above the psychological level of ₹400. However, this rally has paused this week and the contract has been range-bound between ₹410 and ₹418. It is currently trading at the mid-point of this range at ₹414.

The immediate outlook is not clear. A break out on either side of the range ₹410-418 will decide the next leg of move for the contract. A break below ₹410 would trigger a fall to ₹407 immediately and then to ₹400. On the other hand, a strong break above ₹418 can take the contract further higher to ₹422.

Given that the contract had witnessed a sharp rally in a short span of time last week, the possibility is high for a corrective fall in the coming days before the overall uptrend resumes. Having said this, the near-term bias is bearish to see a break and fall below ₹410 towards ₹407 and ₹400. Traders can go short on a break below ₹410 with a stop-loss at ₹413 for the target of ₹403. However, the overall uptrend that has been in place since February remains intact. So a break and fall below ₹400 looks unlikely. As such the uptrend can resume again from ₹400 levels.

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

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