Copper futures rallied 2 per cent last week and closed at ₹899.80/kg on Friday, posting gains for the second week in a row.
The contract marked a 10-month high of ₹903.35 on Friday before moderating to the current level. However, note that ₹900 is a potential barrier that can weaken the uptrend.
Nevertheless, there might not be a bearish reversal in trend but there is a possibility for a sideways correction. Copper futures might consolidate between ₹890 and ₹905.
In case the contract breaks out of ₹905, it can resume the uptrend and the price can touch ₹930. Note that the price band of ₹930-945 is a potential resistance.
But if copper futures slip below the support at ₹890, it can extend the downswing to ₹875, a notable support. The contract might resume the uptrend from ₹875.
Overall, as it stands, there is no clarity with respect to the direction of the next price swing. It depends on the breach of the ₹890-905 price region.
Trade strategy
Stay out for now. Go long if copper futures breaks out of ₹905. Target and stop-loss can be ₹930 and ₹895 respectively.
