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Copper futures (continuous contract) on the Multi Commodity Exchange (MCX) rebounded from the ₹750-levels last week. However, the rally did not sustain and the prices fell after facing resistance at ₹775.
Although the price action on the weekly chart is showing growing influence of bears, bulls have good a chance to defend until the support at ₹750 holds..
If the support at ₹750 is breached, the short-term outlook can turn bearish where we could see the contract falling to ₹718. The downswing might extend to ₹700, an important support.
On the other hand, if the contract recovers from the current levels and surpasses the barrier at ₹775, we can expect it to establish another leg of an uptrend, potentially rallying past ₹800 and touch ₹825.
Nevertheless, as it stands, the bias seems bearish.
Trade strategy
Since there is a support at ₹750, traders can wait for now. Initiate fresh short positions when the contract slips below the support at ₹750. Place stop-loss at ₹775.
When the contract touches ₹718, tighten the stop-loss to ₹730. Exit the shorts at ₹705.
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