Copper futures on the Multi Commodity Exchange (MCX) bounced off support at ₹720 last week. The continuous contract closed at ₹736.7 on Friday, and it has opened the week on a positive note and is up 0.2 per cent so far today.
There was a strong roll-over of 98 per cent in copper futures by the end of last week and, thus, the uptrend is likely to continue, at least in the near-term. That said, the August futures, currently trading at around ₹745, is right on a resistance.
In case the hurdle at ₹745 is breached, the contract can rally to ₹765, the nearest resistance. Subsequent resistance is at ₹780. On the other hand, if the price moderates from the current level, it can fall to the support band of ₹734-736. A breach of ₹734 can drag the contract to ₹725.
Nevertheless, the overall bias is bullish, and the chance of a fresh breakout is high.
Trade strategy
Buy August expiry copper futures at the current level of ₹745. Add more longs in case the price dips to ₹737. Place stop-loss at ₹730 at first.
Move the stop-loss up to ₹745 when the contract touches ₹755. Tighten the stop-loss further to ₹752 when the price rises to ₹760. Book profits at ₹765.