Copper prices have reversed higher after a short-lived corrective fall. The copper futures contract on the Multi Commodity Exchange (MCX), which made a low of ₹754 per kg, have bounced back sharpl. The contract is currently trading at ₹766 per kg.

Outlook

The outlook is bullish. A cluster of supports are poised in the broad ₹755-₹745 region. On the daily chart, the moving average cross-overs strengthen the bullish case. It also indicates that the downside could be limited. As such fresh buyers are likely to enter the market at lower levels.

The MCX copper contract can rise to test ₹780 – an important resistance.  The price action, thereafter, will need close watch.

A decisive break above ₹780 will boost the bullish momentum. Such a break can take the copper futures contract up to ₹800-₹810 in the coming weeks.

On the other hand, failure to breach ₹780 and a downward reversal thereafter can trigger a fall. In that case, there is a chance the contract well edge down towards ₹760 again.

So, as the price goes up to ₹780, caution is needed to see if the contract reverses lower or extends the rise.

Trade strategy

We had suggested a long position above ₹755 a couple of weeks back. We suggest holding the longs with a revised target, though.  Retain the stop-loss at ₹740. Revise the stop-loss up to ₹765 as soon as the contract moves up to ₹775. Exit the long positions at ₹780.

Published on April 1, 2024