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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.
Also read: Lithium is one of the worst-performing commodities this year
Trade strategy
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.
Also read: Resume futures trading in suspended agri commodities, IVPA urges Centre
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