Copper futures on the Multi Commodity Exchange (MCX) has been gradually gaining since the final week of October. It took support at ₹700 and started to move northwards. On Monday, it closed at ₹720.8.
While there are chances for copper futures to see a price decline, it is likely to be only temporary. That is, the downswing is likely to be restricted to ₹718, a potential support. That is, going ahead, we expect the contract to see a price dip to ₹718 and then see a rally to ₹740 in the coming weeks.
But note that if copper futures fall below ₹714, where the 50-day moving average currently lies, the trend can turn bearish for the short-term. Nearest support below ₹714 is at ₹700.
Trade strategy
Buy copper futures at the current level of ₹724. Add longs in case the price dips to ₹718. Place stop-loss at ₹710 at first.
When the contract surpasses the hurdle at ₹730, tighten the stop-loss to ₹720. Book profits at ₹740.