Copper futures started to rally in early January on the back of the support at ₹800. But over the past couple of weeks, it has been facing a barrier at ₹840.

While there has not been a bearish trend reversal, the contract moderated slightly and the February contract is currently hovering around ₹830.

The price action over the past couple of weeks shows that the contract has largely been trading flat. It has been oscillating between ₹824 and ₹840.

Therefore, the next short-term trend can be projected only if copper futures price moves out of the above-mentioned price band.

If there is a breakout of ₹840, copper futures can rally to ₹860, a resistance. A breach of ₹860 can turn medium-term trend bullish.

On the other hand, if the contract slips below ₹824, it can extend the drop to ₹800-790 support band. A break below ₹790 can take copper futures down to ₹770.

Trade strategy

Given the prevailing conditions, the risk-reward is unfavourable for both long and short positions. Traders can wait and initiate trade along the direction of the break of ₹824-840 price band.

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