Copper prices dropped to Rs 686.10 per kg on April 12 as participants increased their short positions as seen by the open interest. The base metal traded in the red in the evening session after a gap down start tracking a weak global trend.
The non-ferrous metal has been trading higher than 20, 50, 100 and 200 days’ moving averages but lower than the 5-day moving average on the daily chart. The Relative Strength Index (RSI) is at 55.07 which indicates bullish momentum in prices.
Industrial metal declined to negative terrain after China’s Premier Li Keqiang stressed the need of controlling the prices of commodities that have burdened industries. Concern about faltering demand and rising copper inventories also weighed on the market.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities said, “China will tighten controls on raw materials to help limit costs for companies that have been pressured by the surge in commodity prices, China National Radio reported, citing Premier Li Keqiang as the country reported its producer prices surged the most in more than two years.”
We expect Copper prices to witness some correction with support at Rs 672 and near term resistance at Rs 698.
“LME Copper could see a Bearish momentum below $ 8,855 level where it could further see $ 8,760-$ 8,710 levels. Resistance is at $ 8,885-$ 8,920 levels,” said Neha Qureshi, Technical Research Analyst at Reliance Securities.
MCX Copper April could see a Bearish momentum up to Rs 684-681 levels. Resistance is at 689-691 levels. Quereshi advised her clients to sell Copper April at Rs 688 with a stop loss of Rs 691 and a target of Rs 683.
The US dollar trades lower at 92.13, down 0.03 percent in the evening session against the rival currencies.
MCX METLDEX decreased 195 points, or 1.36 percent, at 14,189 at 19:36. The index tracks the real-time performance of key base metals.
In the futures market, copper for April delivery touched an intraday high of Rs 688.65 and a low of Rs 681.75 per kg on the MCX. So far in the current series, the base metal has touched a low of Rs 657.85 and a high of Rs 732.70.
Copper delivery for April slipped Rs 3.75, or 0.54 percent to Rs 686.10 per kg at 19:41 hours with a business turnover of 2,996 lots. The same for May contract slides Rs 3.35, or 0.48 percent to Rs 688.40 per kg with a turnover of 333 lots.
The value of April and May’s contracts traded so far is Rs 1,069.67 crore and Rs 62.43 crore, respectively.
MCX Copper is likely to trade with positive bias for the session with supports placed at Rs 684.50-681 whereas resistance is at Rs 692-695.50, said Motilal Oswal. The brokerage firm advised its clients to buy on dip for the short term.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Copper is trading with marginal sideways and positive bias. Prices tested support of Rs 684-680 levels and have risen from these levels. We may expect the market to continue to trade with bullish momentum and test Rs 690-693 levels on the upside.”
At 1418 (GMT), the red metal price was down 0.64 percent, quoting at $ 8,872 per tonne in London.
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