Copper prices have recovered this week after a sharp fall in the past week. The copper futures contract on Multi Commodity Exchange (MCX) tumbled from a high of ₹945.90 per kg last week to a low of ₹880 before recovering to trade at ₹907.
Outlook
The sharp fall last week was a correction within the overall uptrend. The bounce from ₹880 happened just above a key support level of ₹870. That indicates the overall uptrend is intact and a fresh leg of upward movement.
MCX copper futures contract can rise to ₹930 in a week or so. A break above ₹930 will boost the bullish momentum and take the contract up to ₹975.
The rise will be negated only if the contract declines below ₹870. Then there could be a fall to ₹850 initially. A further break below ₹850 will see an extended fall to ₹830.
However, as seen from the charts, the support at ₹870 is likely to hold and limit the downside. As such, there’s a high chance for a rise to ₹930 and ₹975 in the coming weeks.
Trade strategy
Traders can go long now at around ₹907. Accumulate on dips at ₹898. Keep a stop-loss at ₹876. Trail the stop-loss up to ₹915 as soon as the contract moves up to ₹925. Move the stop-loss further up to ₹935 when the contract touches ₹945 on the upside. Exit the longs at ₹960