The copper futures contract traded on the Multi Commodity Exchange (MCX) has risen sharply after recording a low of ₹394.6/kg on June 12.
The contract has moved higher by about 2 per cent in the past week.
Also this reversal has happened from just above an important trend-line support on the weekly chart at ₹394. This leaves open the room for an extension of the current rally in the coming week.
Immediate support for the contract is at ₹405.5. This level is holding well and limiting the fall over the last couple of days. Key supports for the contract are at ₹403.5 and ₹401.5.
The short-term outlook will remain bullish as long as the contract trades above these support levels.
Immediate resistance is near current levels at ₹410. But inability to decline below ₹405.5 makes a breach of ₹410 highly likely.
Such a break can take the contract higher to ₹115, the next key resistance for the contract. Short-term traders can initiate long position. Stop-loss can be kept at ₹405 for the target of ₹415.
However, the medium-term trend is still down. Key resistance is at ₹420. A break above ₹415 can take the contract higher to test this resistance level. The outlook for the MCX-copper futures contract will turn bullish only if it records a decisive close above ₹420.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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