Commodity Radar: Copper charts show solid build-up of longs. Buy on dips for a gain of up to 4% in the short term

Domestic copper prices rose 1.6% to touch a day’s high of Rs 1,334.70 on Tuesday, inspired by international red metal prices hitting a new record high after supply concerns surfaced following disruptions at new mines.The strike at Capstone Copper’s copper and gold mine in Mantoverde in northern Chile has fueled supply problems, Reuters reports. In addition, China’s Tongling Nonferrous Metals Group reported on Sunday a delay in the launch of the second phase of its Ecuadorian mine.

The three-month LME copper contracts were trading around 12,991, up 4.19%, while those on the COMEX were hovering around $6.0820, up 1.78%.Copper prices have been setting new records on a consistent basis, rising more than 60% in the past year.

Commenting on copper’s stellar performance, Ajit Mishra, Senior Vice President – Research at Religare Broking, said copper continues to be the hot commodity for investors along with gold and silver.

The MCX January futures have fallen from a record high of Rs 1,392.

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Technical outlook

Technically, the weekly charts indicate solid build-up in long positions, Mishra says, although he doesn’t rule out a possible near-term pullback. According to him, the medium-term trend remains positive.

For this month, the market seems to have established a base around the Rs 1,200-1,225 region.

Trading strategy

Mishra recommends a buy-on-dips strategy near the support area of ​​Rs 1,300–1,305 with a strict stop loss below Rs 1,248 and a target price of Rs 1,365–1,375. It is important to note that a decisive close below 1,250–1,248 could push prices towards the Rs 1,200–1,210 level.

Also read: Commodity radar: US-Venezuela tensions lift gold prices, but charts point to consolidation. Buy or sell?

(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)