Copper futures, over the past couple of weeks, has been on a flat note. The March futures on the domestic market has been consolidating between ₹860 and ₹875.
Nevertheless, the broader bull trend is valid. The sideways movement is more of a correction and there are no signs of a bearish trend reversal. Going ahead, we expect the contract to break out of ₹875 soon.
In case the correction drags copper futures, the decline is not unlikely to go below ₹850 where there is a trendline support.
Either way i.e., a recovery from the current level of ₹862 or a rally after a dip to ₹850, copper futures will eventually surpass the barrier at ₹875 and will rise towards ₹900, a resistance.
In case the price slips below the support at ₹850, the near-term outlook can turn weak wherein copper futures can drop to ₹840 and ₹820, potential support levels.
Trade strategy
Buy copper futures at ₹860 and ₹855. Place stop-loss at ₹840.
When the contract breaks out of ₹875, raise the stop-loss to ₹860. Tighten the stop-loss to ₹880 when the contract touches ₹890. Book profits at ₹900.