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The continuous contract of copper on the Multi Commodity Exchange (MCX) has been witnessing higher volatility since the May this year. That is, it has seen several price swings since then. The contract dropped from ₹810 in May to ₹685 towards the end of June. It then recovered and hit a high of ₹781 towards the end of July and then again, it saw its price decline. It marked a low of ₹677 by mid-August.
For the past two weeks the contract has been moving in a sideways trend i.e., it has largely been trading within ₹705 and ₹725. Also, the 50-day moving average was at ₹730, essentially making the price area of ₹725 and ₹730 a resistance band. However, last Friday, the contract gathered solid bullish momentum and decisively breached the resistance at ₹730, turning the bias positive.
Substantiating the bullish inclination, the daily relative strength index (RSI) has entered the positive territory and the moving average convergence divergence (MACD) indicator on the daily chart has been trading an upward trajectory since past couple of weeks.
Given the above conditions, traders can buy with stop-loss at ₹715 and look for a potential near-term target of ₹770.
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