Copper prices have been on a strong surge over the last couple of weeks. The copper futures contract on the Comex tumbled to a low of $2.94 per pound earlier this month and was threatening for further sharp fall. However, the contract has made a strong recovery from this low and is currently hovering at $3.28.

On the domestic front, the copper futures contract on the Multi Commodity Exchange (MCX) has reversed sharply higher after making a low of ₹423.1/kg on December 5. The contract has surged over 9 per cent to ₹462. The overall uptrend is intact and there is a strong likelihood of the copper prices can continue to surge .

Outlook: The Comex-Copper contract has a strong support at $3.16. Intermediate dips to this support may find fresh buyers coming into the market. A rally to $3.37 and $3.39 is likely in the coming weeks. The outlook will turn negative only if the contract breaks below $3.16 decisively. Such a breakwill increase the likelihood of the contract falling to $3 or even lower levels.

On the domestic front, the MCX Copper futures contract has a key support near ₹448 which is likely to limit the downside in the short-term. A rally to ₹480 and ₹485 is likely in the coming weeks. Inability to break above ₹485 can trigger a pull-back move to ₹470 and ₹465. But if the contract manages to breach ₹485 decisively, then it can extend its rally to ₹500 and ₹510 levels thereafter.

Traders with a medium-term perspective can go long at current levels. Accumulate on dips at ₹455 and ₹450. Keep the stop-loss at ₹442 for the target of ₹505. Revise the stop-loss higher to ₹472 as soon as the contract moves up to ₹478.

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

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