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The copper futures contract traded on the Multi Commodity Exchange continues to move sideways for the sixth consecutive week. The contract has moved within the ₹414-₹435 a kg range since early August and is currently trading near ₹427 levels. A breakout on either side of this range will decide the next leg of move for the contract.
After recording a high of ₹434.9 on Tuesday, the contract reversed down. The probability for the contract to fall to ₹420 and ₹414 – the lower end of the range in the coming days – is high.
Traders should remain on the sidelines, and wait for a clear trading signal to emerge. However, as mentioned in this column last week, short-term traders with high risk appetite can take positions within this range. Long positions can be initiated at ₹415 with a tight stop-loss at ₹413 for the target of ₹430. Similarly short positions can be taken at ₹434 with a tight stop-loss at ₹437 for the target of ₹420.
As mentioned above, a breakout on either side of ₹414 and ₹435 will determine the next trend for the contract. A strong break above ₹435 will take the contract higher to ₹440 in the short-term. On the other hand, a fall below ₹414 can pull the contract down to ₹409.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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