On March 6 we had recommended initiating fresh short positions if copper futures on the Multi Commodity Exchange (MCX) dropped below support at ₹750. At that time, the contract was trading at around ₹758.
It declined below the support of ₹750 in the very next session. Thus, traders would now be holding short positions initiated just below ₹750, and stop-loss for the same would be ₹775. Hold this position as we are likely to see a further downside from the current levels.
Although the contract has recovered to ₹752 after hitting an intermittent low of ₹738.3 last week, the bias is bearish. The nearest notable support from the current level is at ₹718. Subsequent support is at ₹700.
On the upside, resistance levels are at ₹775 and ₹800.
Trade strategy
Hold the short positions. When the contract touches ₹718, tighten the stop-loss to ₹730. Exit the shorts at ₹705.