The CopperFutures contract traded on the Multi Commodity Exchange (MCX) has moved up in line with our expectations. The rise to ₹700 per kg mentioned in this column last week has happened. The contact made a high of ₹704 and has come-off from there. It is currently trading at ₹698 per kg.
Outlook
There is very limited room left on the upside. Strong resistance is in the ₹710-₹720 region. The current upmove can halt very well in this resistance region. A pull-back from the ₹710-₹720 resistance zone can drag the MCX Copper futures contract lower to ₹680 initially. A further break below ₹680 will see the prices extending the fall up to ₹660.
Related Stories
Decoding the growing gap between India and US markets
Indian sectoral indices are outperforming the US counterparts by a wide marginA strong break and a decisive weekly close above ₹720 are needed to negate the fall. In that case, the MCX Copper contract can gain fresh momentum and rise to ₹750 initially and further higher eventually.
Trading Strategy
Last week, we advised traders to exit the long positions at ₹700. Now traders can go short in three tranches. Sell 30 per cent of the intended amount at the current level of ₹698. Wait for a rise and go short another 40 per cent at ₹705 and the remaining 30 per cent at ₹715. So, the average entry-level will be at ₹706. Keep a stop-loss at ₹725. Trail the stop-loss down to ₹690 when the contract falls to ₹680. Move the stop-loss further down to ₹675 when the contract touches ₹670. Book profits at ₹665.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.