Copper futures on the MCX (Multi Commodity Exchange), after marking a three-month low of ₹738.1 before a couple of weeks, has been moving up since then. However, the rally has hit a wall as the price band of ₹780-790 is a considerable hurdle. The 50 per cent Fibonacci retracement of the prior downtrend coincide at this level, increasing its significance. Moreover, the recent trend has been bearish.

Therefore, copper futures will most probably reverse lower from the current level of ₹780. But if the contract rallies past ₹790, it can negate the short-term bear trend wherein the contract can move up to ₹825.

Nevertheless, we expect the bears to influence the contract more in the upcoming sessions and the price can drop below ₹750. It can potentially drop to ₹718. Considering these factors, one can consider initiating fresh short positions at the current level. Initially, place stop-loss at ₹792 and move it down to ₹770 when the contract slips below ₹750. When the contract touches ₹730, liquidate three-fourth of the total shorts that you hold and then tighten the stop-loss to ₹745. Exit the remaining shorts when price decline to ₹718. Because there could be temporary bounce off this level.

Do note that a clear breach of the support at ₹700 will change the medium-term trend bearish and the sell-off could intensify below ₹700. Notable support below ₹700 is at ₹655.

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