The copper futures contract traded on the Multi Commodity Exchange (MCX) has seen a sharp reversal from its low of ₹404.5/kg recorded on October 17. The contract is currently hovering just below a key short-term resistance at ₹423. Following a shallow decline in September the contract has witnessed a sharp rise in the last two weeks. This reflects the inherent strength in the contract. With this, the probability is high for the MCX-copper futures contract to breach its immediate resistance at ₹423 in the coming days. Such a break will add bullish momentum to the ongoing rally and take the contract higher to the next targets of ₹425 and ₹432.
Traders with a short-term perspective can go long in this contract. Stop-loss can be kept at ₹414 for the target of ₹431.
The bullish view could get negated if the contract fails to breach the resistance at ₹423. A reversal from this level can take the contract lower to ₹415.2 – the 21-day moving average support level. The short-term outlook will turn negative only if the contract records a decisive close below this level. In such a scenario, the contract’s fall can extend to revisit ₹405 levels.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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