Copper futures on the Multi Commodity Exchange (MCX) were largely moving sideways through October. For most part of the month, the November contract was largely held in the ₹646-664 price band.
But as the calendar turned November, the contract started attracting fresh longs and the bullish momentum picked up which was enough to take the price above ₹664. Notably, the cumulative open interest of copper futures on the MCX increased to 7,310 contracts last Friday from 5,673 contracts by the end of the preceding week. This has turned the outlook positive.
However, it should be noted that the broader trend is still bearish and a decisive close above ₹700 can change this otherwise. Nevertheless, the contract can be expected to touch ₹700 in a couple of weeks. A breakout of ₹700 can quickly lift the price to ₹720 where the 200-day moving average lies currently.
As the price action of late shows a positive signal, traders can risk going long now. We suggest buying MCX-Copper futures at the current level of ₹675 and add more longs if price dips to ₹666. Keep stop-loss at ₹648 at first and move it up to ₹678 when the contract crosses over ₹690. Exit the longs ₹700.
For traders who can take a bit more risk, rather than fully liquidating the longs at ₹700, book three-fourth of your positions at ₹700 and hold the rest for a higher target of ₹718. But make sure to tighten the stop-loss to ₹690 once the contract gets over ₹700.