Copper prices have been inching higher over the last couple of weeks. The copper futures contract on the Multi Commodity Exchange (MCX) made a low of ₹425 per kg on March 26 and has reversed higher.

The contract has surged over five per cent and is currently trading at ₹448. The contract has been broadly range-bound between ₹420 and ₹470 since last September.

The recent bounce-back move indicates that this broad sideways range remains intact.

Outlook

The recent upward reversal from ₹425 is technically significant. This bounce has happened from a key trend-line as well the 200-day moving average support, both poised at around ₹435. This leaves the short-term outlook positive for the contract.

The resistance is in the band between ₹448 and ₹450. Inability to break above this hurdle can trigger an intermediate pull-back decline to ₹440.

However, further fall below ₹440 looks unlikely at the moment. An eventual break above ₹450 will then increase the likelihood of the contract rallying towards ₹465 and ₹470 in the coming weeks.

High-risk appetite traders can go long at current levels and also accumulate on dips at ₹443.

Stop-loss can be placed at ₹433 for target of ₹468. Revise the stop-loss higher to ₹453 as soon as the contract moves to ₹458.

The contract will come under pressure only if it records a decisive close below ₹435. In such a scenario, the possibility of the contract falling towards ₹420 or even ₹410.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading.