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Copper has been one of the best performing commodities over the past year and as a result the price of futures continuous contract on the Multi Commodity Exchange (MCX) went up from about ₹360 in March last year and topped ₹745 in the last week of February.
But the futures contract witnessed sell-off in the last week of February and in the first week of March. Consequently, the April futures contract dropped from about ₹732 to ₹664 levels, losing about nine per cent. Nevertheless, the contract started to move in a sideways trend wherein it was largely oscillating between ₹664 and ₹682.
Last week, the contract broke out of the range with good volume which also resulted in the price moving past the 21-day moving average (DMA). While the futures stayed flat in the past few trading sessions, the price band of ₹678 and ₹682 has been offering good support. As long as the price stays above this level, the short-term trend will be positive.
Traders can be positive and initiate fresh long positions on declines with stop-loss at ₹675. Although ₹700 can be a hindrance, the contract will most likely breach this level and appreciate towards ₹718 in the near-term.
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