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Copper futures, over the past couple of weeks, witnessed a significant selling pressure. The November contract on the Multi Commodity Exchange (MCX) fell off the resistance at ₹860.
It slipped below some key levels of ₹835 and ₹815 last week and closed at ₹795.15 on Friday.
According to the chart, the price band of ₹780-790 is a good support. While there might not be a strong rally on the back of this base, we can at least expect a minor corrective upswing. Such a rally can take copper futures to ₹835. But only a clear breakout of ₹850 can turn the trend bullish.
However, if the contract slips below the support at ₹780, it can extend the downtrend to ₹740 and then possibly to ₹700 in the short-term. But as it stands, the chances look good for a corrective rally to ₹835.
Trade strategy
Buy copper futures at ₹795 and place a stop-loss at ₹780. When the contract surpasses ₹815, revise the stop-loss to ₹795. On a rally to ₹825, tighten the stop-loss further to ₹810. Book profits at ₹835.
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