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The copper futures contract traded on the Multi Commodity Exchange has reversed sharply higher after recording a low of ₹403.1 a kg on November 5. The contract seems to be consolidating in a sideways range between ₹403 and ₹423 for more than a month. The contract is now poised at the mid-point of this range.
The rally in the past week has increased the possibility of the contract testing ₹423 – the upper end of the sideways consolidation range. Intermediate resistance is at ₹416. A strong break above this level can take the MCX-copper futures contract higher to ₹420 and ₹423 in the coming days.
Traders with a short-term perspective can go long in this contract at current levels. Stop-loss can be kept at ₹409 for the target of ₹419.
Support for the contract is at ₹410. The bullish outlook will get negated on a decisive fall below this support level. In such a scenario, the contract can fall to ₹405 and ₹403. But such a fall looks less likely at the moment.
A break out on either side of ₹403 and ₹423 will determine the next leg of move for the contract. A break above ₹423 will be bullish for the target of ₹430. On the other hand, decline below ₹403 will bearish for the target of ₹400 and ₹398.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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