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The Copper futures contract traded on the Multi Commodity Exchange (MCX) extended its fall breaking below ₹300 a kg in the past week. The contract declined over 3 per cent to record a low of ₹293.5 on Monday. However, it managed to reverse higher and surge over 2 per cent on Tuesday to ₹303.25. But this bounce back rally does not seem to be gaining further momentum - the contract has come off from this high in the trade on Wednesday evening and traded at ₹298. The immediate outlook is not clear. So traders can stay out of the contract. Whether it manages to rise decisively above ₹300 from here or is going for decline again from current levels will decide the next leg of move.
A strong rise and a decisive close above ₹305 will ease the downside pressure. In such a scenario, the contract can extend its up move to ₹310 and ₹315. If the contract manages to break further above ₹315, then the corrective rally can extend to ₹320. With key resistances at ₹315 and ₹320, the upside for the contract is expected to be restricted to these levels at the moment.
On the other hand, if the contract fails to rise past ₹300 and starts to decline from current levels itself, then a fall to ₹295 is possible immediately. A strong break below ₹295 will increase the downside pressure and trigger a fresh fall to ₹285 and ₹280.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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