The outlook for copper futures traded on the Multi Commodity Exchange (MCX) has turned bullish. The downtrend that had begun in the second week of May halted at a low of ₹378.45/kg recorded on Friday. The contract has reversed sharply higher from this low and is currently trading near ₹389.

Technically, the bounce back witnessed in the past week is very significant since the reversal has happened from a key support level at ₹377. The 50-per cent Fibonacci retracement level, a trend-line and the 100-day moving average level – all these three technical supports are poised around ₹377. This suggests that a break below ₹377 might not be easy for the contract going forward. It also indicates that the prior down move from ₹421 to ₹378 is just a corrective fall with in the overall uptrend.

Immediate support is at ₹385. A rise to test the resistance at ₹394 looks likely in the coming days. A break above this hurdle can take the contract further higher to ₹400. Traders can go long. Stop-loss can be kept at ₹383 for the target of ₹398. Intermediate dips to ₹385 can be used to accumulate long positions.

The outlook will turn bearish only on a strong break and close below ₹377. The next target will be ₹370. But such a sharp fall looks unlikely at the moment.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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