Copper futures marked a 10-week high of ₹886.90 (per kg) on June 5. But it moderated in the following sessions and is currently hovering around ₹875.
From the current level, the contract can moderate further to ₹866, where the 21-day moving average (DMA) currently is. A trendline coincides at this level, making it a considerable support.
There is another support immediately at ₹862 and so, copper futures can start rallying on the back of the ₹862-866 support band. The upswing can potentially lift the contract to ₹910 and ₹930, notable resistance levels.
On the other hand, if copper futures breach the support at ₹862, the near-term outlook can turn bearish. In such a scenario, the contract can drop to ₹852, its 50-DMA. Subsequent support is at ₹835.
Trade strategy
In the first week of June, we had suggested buying copper futures (Jun) at ₹875. Traders can retain this trade. Add longs in case the price dips to ₹865. Maintain stop-loss at ₹850.
When the contract rises to ₹910, revise the stop-loss to ₹890. On a rally to ₹920, tighten the stop-loss to ₹905. Book profits at ₹930.