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The copper futures contract traded on the Multi Commodity Exchange is stuck in a sideways range between ₹430 and ₹438 since July 3. A break out on either side of this range will determine the next leg of move for the contract.
Traders who have taken short position last week at ₹437 last week can square-off their position at current levels.
The trend is up for the contract, it is therefore safe to go long now. Traders can initiate fresh long position at ₹431 with a tight stop-loss at ₹429 for the target of ₹436.
Alternatively, long positions can be initiated if the contract breaches ₹438. In such a scenario, go long at ₹439 with a stop-loss at ₹436 for a target of ₹443.
The short-term outlook will turn bearish if the contract declines below ₹430. The ensuing targets on such a fall will be ₹428 and ₹422 – the 200-week moving average. However, the downside in MCX-copper could be limited to ₹420. There is double bottom pattern on the weekly candle stick chart. The neckline support level of this pattern is poised near ₹420. So short-term declines to this level, if seen, can attract fresh buying.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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