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Post the sharp decline in prices in March last year, the copper futures contract on the Multi Commodity Exchange (MCX) quickly reversed the direction northwards.
The contract bottomed out at about ₹360 and has been rallying since then. The nearest expiry contract i.e., the April series registered a high of ₹732.7 in the final week of February. Therefore, the price more than doubled in an year exhibiting a strong bullish momentum.
But since hitting the high in February, the contract began to lose traction wherein it started to depreciate.
However, the price band of ₹660-₹670 provides a good support. On Monday, though, the contract jumped by a little over three per cent with good volume, hinting that fresh buys are coming in and the bulls might make an attempt to take the driver’s seat.
The 50-day moving average lies within the support band of ₹660 and ₹670, making it a stronger base. Indicators like the relative strength index and the moving average convergence divergence on the daily chart which has been showing a loss in upward momentum, are now giving signals of fresh bullish momentum being built-up.
Traders can be bullish and go long in MCX copper on dips with stop-loss at ₹660. The contract is likely to rally to ₹700 and then to ₹715 in the short run.
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