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The continuous contract of copper on the Multi Commodity Exchange (MCX) was moving in a sideways trend between ₹735 and ₹760 since the beginning of 2022. But in early February, the contract rebounded from the support at ₹735, consequently breaking out of ₹760.
A rising trendline support, which can be observed in daily chart, also coincided at ₹760, making it a strong base. This has now become a support and the outlook will turn positive as long as the contract is above ₹760 or above the rising trendline. One should track this trendline actively as this is a dynamic support.
Post breakout, the contract hit a high of ₹791.5 last week. But it has now come down and hovering around ₹765. Thus, the support at ₹760 stays valid and the RSI and the MACD on the daily chart remain in their respective bullish territory. However, the cumulative open interest on the MCX has dropped to 4,483 contracts from 5,212 contracts a week back. Thus, there has been long unwinding over the past week. Nevertheless, as mentioned above, bulls have an edge over bears until price stays above ₹760.
Before a week, we suggested to initiate longs at around ₹780 and on a dip to ₹768. Recommended stop-loss was at ₹755.
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Traders can continue to hold this position. One can also buy afresh if you have not done before with same stop-loss. Exit the longs at ₹810 as this is a critical resistance.
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