Copper futures on the Multi Commodity Exchange (MCX) have been on a decline since the beginning of this month. It started to fall after facing resistance at ₹740.
On Monday, the contract dropped below the 50-day moving average. It also broke below a rising trendline support. These have turned the outlook weak for copper futures.
As it stands, the contract looks set to fall towards the support band of ₹690-700. A breach of ₹690 can lead to another leg of sharp downswing.
On the other hand, if copper futures bounce off the above-mentioned support band, it could move up to ₹725. The contract should break out of this level to turn the trend positive.
Trade strategy
Go short now at around ₹715 and add more shorts in case copper futures inch up to ₹720. Place stop-loss at ₹730. Book profits at ₹700.