Copper futures on the Multi Commodity Exchange (MCX) began the week with a gap-down. Incidentally, today is the expiry of the October futures. Post the session open today, prices have dropped.
However, from a broader perspective, the continuous copper futures contract has moved in a range since the final week of August. That is, since then, it has largely oscillated within a band of ₹632 and ₹675. Although, technically, the next leg of trend will be uncertain while the price stays within this range, the overall trend is bearish. It will stay as such until the contract decisively breaches the price band of ₹675-685.
If the support at ₹632 is breached, we might see a quick fall to the support band of ₹585-600. Subsequent support is at ₹550. On the other hand, a breakout of ₹685 could turn the stance bullish. Resistances above ₹685 are at ₹700 and ₹720.
Since the contract has been trading below ₹685, take a bearish view from the trading perspective. We have been recommending shorts since the beginning of September at various price points between ₹640 and ₹675, with initial stop-loss at ₹715. The stop-loss was revised to ₹685 in early October. Hold these positions if you have initiated shorts earlier.
Going forward, revise the stop-loss to ₹670 if the contract slips below the ₹600-mark, and move it down further to ₹615 when the price touches ₹585. Exit the shorts at ₹550.
For fresh positions, wait for now, and go short after the support at ₹632 is breached. Stop-loss and adjustments can be the same as above.