MCX-Copper (₹376.8)

After a strong 21 per cent rally in November, the MCX-copper futures contract witnessed a corrective fall in December. The contract fell 4.8 per cent last month. It is currently stuck in between its support at ₹365 per kg and resistance at ₹383 per kg. A range-bound move is possible between ₹365 and ₹383 for some time. A breakout on either side of ₹365 or ₹383 will then decide the next move.

A strong break above ₹383 is needed for the contract to gain momentum and revisit ₹400-410 levels. But, on the charts the presence of the 200-week moving average at ₹383 leaves the bias bearish for a break below ₹365. Such a break will see the downtrend extending to ₹350 or ₹345 in the coming weeks. The level of ₹350 is the 61.8 per cent Fibonacci retracement support and ₹345 is the 21-week moving average.

The corrective fall therefore is likely to halt in the ₹350-345 region. There is a strong likelihood of seeing a reversal from the ₹350-345 support zone. Such a reversal may trigger a rally to ₹380 and ₹385 once again.

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