Commodities

Short-term resistance ahead for MCX-copper

Gurumurthy K BL Research Bureau | Updated on July 09, 2014

bl24 copper.jpg





After rallying continuously for over three weeks, the copper futures contract traded on the Multi Commodity Exchange (MCX) paused in the last one week. The contract is consolidating sideways between ₹431 and ₹438 a kg since last Thursday. A breakout on either side of this range will decide the ensuing trend.

The level of ₹438 which is the 38.2 per cent Fibonacci retracement level is a key short-term resistance level for the contract. Given the fact that the MCX-copper has risen sharply by about 10 per cent in less than a month, there is a high probability for this resistance at ₹438 to hold. Inability to breach this level can trigger an intermediate corrective fall in the contract in the coming days. Such a fall candrag the contract lower to ₹425. This will be a good opportunity for traders to initiate fresh short position.

If the contract reverses lower from ₹438, short-term traders can go short at ₹437 with a stop-loss at ₹442 for the target of ₹427.

On the upside , the current uptrend canextend further only if the contract breaches ₹438 decisively. Fresh long positions can be avoided until this level is breached. Such a breakout can take the contract higherto ₹431 in the near-term. It can also pave way for an up move to ₹452 – the next key 50 per cent Fibonacci retracement resistance level.

Published on July 09, 2014

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor