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Copper futures on the Multi Commodity Exchange (MCX) appears to have crossed the corrective phase following a breakout on Monday.
The November contract, after hitting a high of ₹880 on October 7, saw its price decline in the following sessions. Last week, it had closed at ₹847.80.
Notably, in the recent times, the contract was largely oscillating within a range i.e., between ₹832 and ₹850. But on Monday, copper futures surpassed ₹850.
The chart shows that the contract has formed a good base at ₹832, on the back of which the bulls have gained strength to lift the price above the resistance at ₹850.
A rally past ₹850 has opened the door for further upside. In the near-term, we expect copper futures (November) to touch ₹875. Resistance above ₹875 is at ₹900.
On the other hand, if the contract falls from the current level, the support at ₹832 can arrest the fall. That said, a breach of this base can lead to a fall to ₹800.
Trade strategy
The probability for a rally is high. So, traders can buy copper futures (November) now at ₹852 and accumulate if the price dips to ₹840. Keep stop-loss at ₹830.
When the contract hits ₹865, revise the stop-loss to ₹852. On a rally to ₹870, tighten the stop-loss to ₹860. Book profits at ₹875.
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