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The continuous contract of copper on the Multi Commodity Exchange (MCX) has been in a long-term uptrend since it had bottomed out in March 2020 at around ₹335 per kg. But, the contract has met with a key resistance in the band between ₹800 and ₹810 in early May and began to decline.
The contract has been in a medium-term downtrend since early May.
After testing resistance at ₹725 recently, the contract declined by one per cent on Wednesday to trade at ₹713 levels. Both the daily and the weekly relative strength indices are featuring in the neutral region.
Prospects in store
Over the past two weeks, the contract has been in a sideways band between ₹700 and ₹725.
A decisive breakthrough on either side of this range will decide the short-term direction for the contract.
An emphatic break above ₹725 will alter the short-term downtrend and can take the contract northwards to ₹750 and then to ₹763 over medium-term.
On the other hand, a conclusive fall below the immediate key base level of ₹700 will strengthen the downtrend and pull the contract down to ₹675 in the short term.
Traders with a short-term perspective should tread with caution as long as the contract is range-bound between ₹700 and ₹725.
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