Copper price rebounded a couple of weeks back. Consequently, the copper futures on the Multi Commodity Exchange (MCX) rose after taking support at ₹740. It is currently trading at around ₹776.
That said, the contract now faces a resistance at ₹790. On the other hand, it has a support at ₹767. Therefore, the next leg of trend will depend on the breach of the range ₹767-790.
If the contract rallies past ₹790, we can expect it to appreciate to ₹850. Whereas a breach of the support at ₹767 might drag the contract to ₹740. Given these factors, we recommend traders staying out of the market and initiate trades along the direction of the break of the range.
Stay on the fence for now. Go long on April futures of copper when it breaks out of the hurdle at ₹790. Place stop-loss at ₹770 at first. When the contract rallies past ₹830, modify the stop-loss to ₹810. Book profits at ₹850 as there can be a decline off this price level.
On the other hand, if the contract slips below ₹767, short the contract and keep stop-loss at ₹782. Book profits ₹740. The contract might witness a recovery post falling to ₹740.