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.
A 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.