The futures of copper on the MCX (Multi Commodity Exchange), which was on a rally since the third week of July, is facing a resistance in the ₹670-700 range.

Unable to rally past this level, the contract was consolidating a bit. In fact, it started facing selling pressure last week and it has now declined to about ₹640.

Since the overall trend is bearish, the likelihood of a decline from the current level is high. We expect the contract to slip below the nearest support, which is at ₹600, and extend the decline to ₹585. A breach of this can drag the contract to ₹550. If the contract appreciates from here, it is likely to be capped at ₹670.

A week ago, we had recommended a short position at ₹665 and suggested to add shorts when contract rallies to ₹700. Our suggestion on initial stop-loss was at ₹745. But the contract reversed without moving up to ₹700.

Traders who initiated this trade can continue to hold the shorts. As a move above ₹700 looks very low now, tighten the stop-loss to ₹715. Modify this to ₹670 once the contract slips below ₹600. Revise it further down to ₹615 when price touches ₹585. Liquidate all the shorts at ₹550.

For fresh trades, wait for the contract to rally to ₹655 and then go short with stop-loss at ₹715. Make the adjustments as suggested above when the contract declines in line with our expectations.