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Copper prices have risen well since mid-February. The Copper futures contract traded on the Multi Commodity Exchange (MCX) fell to a low of ₹699.50 per kg in February. From there the prices have risen sharply. It is now trading at ₹731 per kg.
Outlook
The price action on the charts indicate that the long-term downtrend is getting broken. Strong support is in the ₹725-715 region. Clusters of moving averages are also poised in this region. That makes the ₹725-715 support very strong, and it would be difficult for the Copper contract to break below it.
- Also read: India has the highest recycling rates globally for copper, reveals ICA India ‘stock and flow model’
The moving averages on the weekly chart are also on the verge of making a bullish cross over. This strengthens the bullish case. It also indicates that the downside could be limited and fresh buyers can come into the market at lower levels.
We expect the MCX Copper contract to rise to ₹740-745 in the next few weeks. Such a rise will strengthen the bullish picture. It will then keep the doors open for the Copper futures contract to target ₹770-780 in the medium-term over the next few months.
Trading strategy
Traders can go long now at ₹731. Accumulate on dips at ₹726 and ₹722. Keep the stop-loss at ₹718 initially. Trail the stop-loss up to ₹734 as soon as the contract moves up to ₹737. Move the stop-loss further up to ₹739 when the price touches ₹742. Exit the long positions at ₹745.
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