The copper futures contract is continuing to oscillate around its 200-day moving average level of ₹432 a kg for the fifth week now.
The contract has been ranged between ₹424 and ₹439 since July. Within this, the contract is now moving lower after testing the upper band of the range last week.
Currently, the contract is poised at the mid-point of this range.
The probability is high now for it to move lower to test ₹424 – the lower end of the range.
However, the bias is positive since the preceding trend is up. So the sideways move could just be a pause after the strong rally from the low of ₹394.6 in June.
Having said this, it would be safe for traders to play the current range from the long side. Wait for declines to ₹424 and go long on a reversal from here at ₹425. Stop-loss can be kept at ₹419 for the target of ₹436.
The next leg of the move for the MCX-copper would be determined only after the contract breaks out on either side of ₹424-439.
Declines below ₹424 can drag it to ₹420 while breach of ₹439 will open doors for a rally to ₹450.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)