Copper futures (July contract) on the Multi Commodity Exchange (MCX) has been on a decline for nearly three weeks. However, last week, the contract rebounded on the back of the support band of ₹835-845.
The contract is currently hovering around its 50-day moving average at ₹875. This is a potential resistance. However, given the current momentum, the chances are high for copper futures to advance further, possibly to ₹915 in the near-term.
Nevertheless, there might be a minor correction in price from the current market price. Such a retracement in price can drag copper futures to ₹855, where its 20-day moving average lies now.
The trend will turn bearish only if the contract breaks below the support at ₹835. Until then, the bulls are expected to have an upper hand.
Trading strategy
Last week, we suggested buying copper futures at ₹840 with a stop-loss at ₹828. Retain this trade. Going ahead, when the contract rises past ₹875, alter the stop-loss to ₹855. On a rally to ₹900, tighten the stop-loss to ₹885. Book profits at ₹915.
Participants looking for fresh entries can wait for the breakout of ₹875 and then go long for a target of ₹915. Consider the stop-loss adjustments mentioned above.