Copper futures on the Multi Commodity Exchange (MCX) set off for a northward move in the final week of October 2023 after finding support between ₹690 and ₹700.
The January series copper futures, which is the running expiry, extended the upswing and broke out of a hurdle at ₹735 last week. But then, the contract softened, and it closed at ₹731.1 on Monday.
Despite the recent drop in price, the contract retains its bullish bias. From the current level of ₹732, copper futures has its nearest support at ₹728 – its 20-day moving average.
Below ₹728, there is another notable support at ₹720. As long as the price remains above ₹720, the inclination will be bullish. The chart shows that the copper futures has the potential to rally to ₹750 in the near-term.
On the other hand, if copper futures fall below ₹720, the short-term outlook could change bearish. But as it stands, this is unlikely to happen.
Trade strategy
Last week, we suggested long on January futures at ₹732 with a stop-loss at ₹720. Hold on to this trade. When the contract rises above ₹742, tighten the stop-loss to ₹732. Exit at ₹750.