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Copper futures traded on the Multi Commodity Exchange (MCX) have broken down from their ₹363-375 a kg range. The contract is currently trading near ₹361.50.
Key resistance is at ₹364. Immediate support is at ₹358, which is likely to be tested now. The contract is likely to reverse higher from ₹358, but a break past ₹364 is unlikely.
A decline below ₹358 will drag it lower to ₹353. A failed inverted head and shoulder pattern is visible on the daily chart. The neckline level of this pattern is poised at ₹364 which makes this level strong resistance.
Having said this, as long as the contract trades below ₹364, there is a strong likelihood of a break and fall below ₹358. Short-term traders can go short. Stop-loss can be kept at ₹365 for the target of ₹355.
The downside pressure on the contract will ease only on a strong break above ₹364. The ensuing targets on such a break will be ₹372 and ₹375.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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