Copper prices have been rising since the beginning of 2019. The copper futures contract on the Multi Commodity Exchange of India (MCX) had tumbled 10 per cent in the last quarter of calendar year 2018.

However, the prices have reversed sharply higher since January 2019 and the base metal has surged 10 per cent so far this year, recovering almost all the losses made during the last quarter of 2018. The MCX Copper futures contract is currently trading at ₹447/kg.

The uptrend that had begun in January halted after touching a high of ₹451.35 on February 6. The contract fell briefly for about a week thereafter. The corrective fall found support from the 38.2 per cent Fibonacci retracement support level of ₹430.

The contract made a low of ₹430.65 on February 12 and has reversed higher from there. The bounce-back from ₹430 keeps the overall uptrend intact.

A key resistance is at ₹452. A strong break above it will see the contract surging to ₹470 initially. Such a rally will also confirm an inverted head-and-shoulders reversal pattern on the daily chart.

A further break above ₹470 will then increase the likelihood of the contract targeting ₹485 or even higher levels.

Traders with a medium-term perspective can go long at current levels and also accumulate on dips at ₹440.

A stop-loss can be placed at ₹427 for the target of ₹485. Revise the stop-loss higher to ₹455 as soon as the contract moves up to ₹465.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading.

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