Copper prices have been oscillating in a sideways range for more than two weeks now. The MCX copper futures contract has been stuck between ₹710 and ₹727 per kg. Within this range, the contract fell to a low of ₹711.85 on Tuesday before rebounding. It is currently trading at ₹716 per kg.
Outlook
The short-term trend is upwards. The contract has been moving up gradually since the last week of October in a bull channel pattern. The channel support is in the ₹710-709 region. This has been holding well. The recent bounce from the low of ₹711.85 indicates that the channel is intact.
As such the copper futures contract is highly likely to move up within the channel in the coming days. Intermediate resistance is at ₹719. A break above it can take the contract up to ₹730 — the upper end of the channel in the coming days.
The outlook will turn negative if the contract declines below ₹709 and it can fall to ₹700 initially and ₹685 eventually.
Trade strategy
Traders can buy the copper futures contract at the current levels of ₹716. Accumulate more on dips at ₹712. Keep the stop-loss at ₹708. Trail the stop-loss up to ₹718 as soon as the contract moves up to ₹721. Move the stop-loss further up to ₹723 when the contract touches ₹726. Exit the long positions at ₹728.