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The price of copper futures on the Multi Commodity Exchange (MCX)has witnessed an uptrend since April last year after bottoming out at ₹360. The rally has been so strong that the futures hit a high of ₹737 in February this year. While the contract witnessed a couple of consolidation period during the uptrend, there was no considerable price correction until recently. That is, since April last year, copper futures faced considerable price correction only over the past couple of weeks.
The March contract of the metal tumbled from a high of ₹737 and touched a low of ₹663.3 early this month. The decline was arrested by the support band of ₹662 – its 50 per cent Fibonacci retracement level – and ₹670. Since then, the contract has been sluggish and has been unable to establish a trend in either direction. Since the major trend remains bullish despite correction and there is a good support band, bulls might start to gain traction from here.
However, it is clearly not a screaming buy and traders can wait until fresh signs of uptrend occurs. Probably a breakout of ₹686 can bring back buying interest. Traders can buy MCX-copper with stop-loss at ₹670 if it breaks out of ₹686.
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