Copper futures (continuous contract) on the Multi Commodity Exchange (MCX) faced stiff resistance at ₹800 and have declined over the past week. Specifically, the February futures could not rally beyond ₹790 and has moderated to the current level of ₹772.
However, the overall trend remains bullish and the recent corrective decline is likely to be arrested between ₹750 and ₹760. We anticipate the February copper futures to rebound anywhere within this price region and appreciate to ₹800. There is a good chance for the contract to rally beyond this level and rally to ₹825 in two to three months’ time.
But note that a breach of the support at ₹750 can turn the outlook bearish where the contract can see a quick decline in price to ₹720 and possibly to ₹700.
Although the overall trend is bullish, the contract could extend the corrective decline from the current level of ₹772 to ₹760. So, wait for the price to soften to ₹760 and then initiate fresh long positions. Stop-loss can be placed at ₹740 at first and revise it to ₹785 when the contract crosses over ₹800.
When the price touches ₹810, move the stop-loss further up to ₹795. Exit the longs at ₹820.