The copper futures contract traded on the Multi Commodity Exchange (MCX) is continuing to find resistance near ₹438 a kg. The contract has reversed lower after recording a high of ₹436.85 on Friday. Currently, it is range-bound and is oscillating around its 200-day moving average level of ₹432.
The contract has been consolidating in a sideways range of ₹424 and ₹438 since the beginning of this month. A break out on either side of this range will decide the next leg of move for the MCX-copper contract. Traders can stay out of the market and wait to get a clear signal before taking position. The overall outlook is positive so it is safe to avoid taking short position in this contract. A strong break above ₹438 will increase the bullish momentum and can take the contract higher to ₹450. Traders can use such a break to initiate fresh long position at ₹440. Stop-loss can be kept at ₹434 for a target of ₹450.
On the other hand, if MCX-copper declines below ₹424, it can fall to test ₹420 and ₹418. In this case, traders can wait for declines to initiate fresh long position at ₹420 with a stop-loss at ₹415 for the target of ₹435.
With a double bottom pattern on the weekly chart, the downside for the MCX-copper is expected to be limited to ₹418.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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