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The copper futures contract traded on the Multi Commodity Exchange has rallied 2.6 per cent in the past week.
The contract is hovering near a very crucial resistance level of ₹420/kg over last couple of days. The price action in the coming week is going to be very crucial.
The immediate direction of move is not very clear although the short-term bullish outlook remains intact. The MCX-copper futures contract has crucial resistances ahead at ₹420 and then at ₹421.2 (200-week moving average). Inability to breach these levels can drag the contract lower to ₹414 in the coming week.
Supports for the contract are placed at ₹415.3 (100-day moving average) and then at ₹414 which is a trend-line support.
The short-term outlook will turn negative if the contract declines below ₹414. The ensuing targets on such a break will be ₹408/kg.
On the other hand, if the contract reverses higher again from ₹414, the short-term outlook will remain bullish. It will also keep alive the chances of breaching the crucial resistance at ₹421. Short-term traders can go long at ₹416 with a stop-loss at ₹413 for the target of ₹420.
Alternatively, traders can also go long if the contract move higher from current levels and breaks ₹421 immediately. Initiate fresh long position at ₹422 with a stop-loss at ₹419 for the target of ₹426.
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