Commodity Calls

MCX-Copper gains momentum

Gurumurthy K BL Research Bureau | Updated on January 11, 2018 Published on July 25, 2017

copper



The up-move in the price of copper is gaining momentum. The copper futures contract traded on the Multi Commodity Exchange surged over 2 per cent on Tuesday and is currently trading at ₹400 per kg.

The copper price was under pressure and was on a strong downtrend between February and May. The price had reversed higher in May thereby reversing the downtrendin place since February.

The COMEX-Copper futures contract made a high of $2.82 per pound in February and fell sharply to a low of $2.47 per pound in May. The contract has reversed higher from this low and is trading near $2.80. The MCX-Copper contract, which moves in tandem with COMEX-Copper, fell from a high of ₹415 in February to a low of ₹353 in May.

The short-term outlook is bullish. Key supports for the COMEX-Copper contract are at $2.75 and $2.71. If it manages to close decisively above $2.80 per pound it can gain momentum. In such a scenario, there is a possibility of the contract rallying to $2.95 or $2.98 in the coming weeks.

But if the contract fails to extend its upmove strongly above $2.80, a near-term pullback to $2.75 or $2.71 is possible. A further fall below $2.71 is less probable.

On the domestic front, the contract has key supports at ₹390 and ₹385, which are likely to limit the downside in the short term.

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Published on July 25, 2017
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