The uptrend in continuous futures contract of copper on the Multi Commodity Exchange (MCX) began after it hit a low of ₹336 in March 2020. The bull trend lost momentum after price reached ₹810 in May 2021. Since then, the futures has been tracing a broad sideways trend i.e., oscillating between ₹685 and ₹810.
But last week, it broke out of the resistance and closed at ₹840.3. This has significantly increased the chances of the contract appreciating further. While it hit a new high of ₹886 on Monday, it is currently hovering around ₹850. Going forward, the contract could decline and retest the resistance-turned-support level of ₹810 before rallying past ₹886 and touch ₹900.
The contract could even rally to ₹935. However, a break below ₹810 can weaken the bulls, leading to a possible price correction to ₹760.
Nevertheless, given that the major trend is bullish and the contract has seen a breakout of late, one can consider fresh buys on MCX copper futures.
Traders can go long at current level of ₹850 and accumulate more when price drops to ₹810. Keep the stop-loss at ₹780. When the contract drops to ₹810 and moves up or starts rallying without a dip, one can shift the stop-loss to ₹840 when it decisively breaches ₹886. Liquidate the longs when the price touches ₹935.