Copper prices have been falling for more than a week now. The Copper Futures contract traded on the Multi Commodity Exchange (MCX) touched a high of ₹867.40 per kg earlier this month and has come down sharply by about 6 per cent from there. It is currently trading at ₹816 per kg.
Outlook
Last week in this column we said that the Copper Futures contract can fall to ₹825 and then rise back again. But the 1 per cent fall today has dragged the price below this level. However, there is a strong support around ₹810. This can be tested now.
We can expect the contract to reverse higher from around ₹810. Such a bounce can take the MCX Copper Futures contract up to ₹820-822 in a week or two. The price action thereafter will need a close watch. A decisive break above ₹822 will boost the momentum and take the contract up to ₹835.
On the hand, failure to breach ₹822 can drag the contract down to ₹810 again. A break below ₹810 can take the contract further down to ₹800-₹790 going forward.
Trade strategy
Last week we had suggested to go long at ₹825. Traders who have taken this trade can accumulate at ₹812. Retain the stop-loss at ₹805. Revise the stop-loss up to ₹816 as soon as the contract goes up to ₹822. When the price goes up to ₹850 move the stop-loss up to ₹835. Exit the longs at ₹865.