The continuous contract of copper on the Multi Commodity Exchange (MCX) has been displaying bullish bias since February. After bouncing off the strong base at ₹732, the contract rallied sharply and hit a record high of ₹886 in early March. However, what followed was a swift fall in price. Nevertheless, the overall trend remains bullish and it has been forming higher highs and higher lows since February.

Supporting the bullish bias, the price remains above the 21- and 50-day moving averages (DMAs) and it has bounced off the 21-DMA thrice in the last two months. The RSI and the MACD indicators on the daily chart lie in their respective positive territory. Moreover, the cumulative open interest (OI) of copper futures on the MCX has increased to 4,432 contracts as on Tuesday compared to 4,036 contracts a week back. Increase in OI along with a rally in a bullish sign.

Therefore, the contract can be expected to retest ₹886 in the near-term. A breach of this level can lift the contract to ₹935 over the medium-term. So, one can take bullish bets on copper.

In early March, we recommended longs at ₹850 and then at ₹810 with stop-loss at ₹780. Traders can retain the buy trades. Others can also consider initiating fresh long positions at the current level of ₹815 with the same stop-loss i.e., ₹780. Shift the stop-loss to ₹840 when the contract decisively reaches ₹886. Liquidate the longs when price touches ₹935.

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