Copper futures on the Multi Commodity Exchange (MCX) broke out of a resistance early this week, turning the near-term outlook positive.
The September contract broke out of the resistance at ₹816 on Tuesday and has extended the rally. On Wednesday, it had closed at ₹832.
The breakout has confirmed a double-bottom chart pattern in daily timeframe. As per this set up, copper September futures is likely to touch ₹850 soon before expiry.
But if the contract declines from the current level, it can find support between ₹816 and ₹820. A break below ₹816 before expiry is less likely. Note that the September futures of copper will expire on September 30.
Trading strategy
Last week, we recommended buying copper futures (September) when it surpasses ₹816. Traders who initiated this trade can retain it.
However, revise the stop-loss from ₹795 to ₹825. Book profits at ₹850. In case neither the target nor the updated stop-loss is triggered till September 30 (expiry day), consider exiting them in the second half of the session.