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    Copper’s outlook bearish, may trade in Rs 418-433 range

    Synopsis

    Strategy for MCX Copper June 2019 is Sell on rise in the range of Rs 427-428 with a stop loss of Rs 433 and a target price of Rs 418.

    Copper-Getty-1200Getty Images
    By Pritam Kumar Patnaik

    The US-China trade war has had a huge impact on copper. The copper prices have taken a beating since the start of the trade conflict. Last week too, the metal initially recouped some losses but ended the week on a weaker note amid continued escalation in trade tensions.

    The week started with negative news for copper after China said that it would impose higher tariffs on US imports on a revised $60 billion target list, hitting back at US government’s move to increase tariffs on $200 billion worth of Chinese goods. Additionally, China reported surprisingly weaker growth numbers in retail sales and industrial output for the month of April 2019, adding pressure on Beijing to continue to roll out more stimulus. The data suggested consumers were now beginning to cut back spending on everyday products such as personal care and cosmetics, while continuing to shun more expensive items such as cars. China's exports also unexpectedly shrank in April 2019, in the face of higher US tariffs and weaker global demand, while new factory orders from home and abroad remained sluggish. Hedge funds and money managers too increased their bearish stance on copper during the week.

    That said, the downside remained limited amid hopes the US and China would work out a trade resolution soon. Active stimulus measures from China in response to an escalation in the Sino-US trade war could eventually drive metals prices higher. While it is widely expected that the ongoing trade war will impact China's economy far more than that of the US, we expect Beijing will mostly be able to offset the negative impact with aggressive policy changes and stimulus. The market will closely track the impending talks between Trump and Jinping, slated during the G-20 summit. Additionally, prices could also find support amid reports that US President Donald Trump is expected to delay a decision on imposing tariffs on cars and spare parts imported from EU, by as much as six months, thereby avoiding opening yet another front in his global trade battles.

    Thus, going forward the developments from the talks during the G-20 summit and a formal announcement on delaying the EU imports will dictate the copper prices.

    Technically, MCX Copper June 2019 contract, on weekly chart, has started to trade below its 100 day-weekly moving average which is placed at Rs 437 and this will act as an immediate resistance.

    On the daily chart, it has given a death crossover of 50*200 daily moving averages which is consider as a Bearish Crossover. In addition, weekly momentum indicator MACD has given negative crossover which indicates negative breath in the counter. As per above technical parameter, Copper is expected to trade on bearish node & it is expected to trade in range of Rs 418-433 levels.

    For next week, strategy for MCX Copper June 2019 is Sell on rise in the range of Rs 427-428 with a stop loss of Rs 433 and a target price of Rs 418.

    Base Metals:
    Aluminium: Buy MCX Aluminium May 2019 contract in the range of Rs 149-149.50 with a stop loss of Rs 147 and a target price of Rs 153.

    Nickel: Buy MCX Nickel May 2019 contract in the range of Rs 449-450 with a stop loss of Rs 440 and a target price of Rs 465.

    Bullion:
    Silver: Sell MCX Silver July 2019 contract in the range of Rs 36,700-36,750 with a stop loss of Rs 37,000 and a target price of Rs 36,300.

    Energy
    Crude Oil: Buy MCX Crude Oil June 2019 contract in the range of Rs 4,420-4,440 with a stop loss of Rs 4,310 and a target price of Rs 4,600.

    Agri Commodities:
    Cotton: Buy MCX Cotton June 2019 contract in the range of Rs 21,200-21,250 with a stop loss of Rs 20,900 and a target price of Rs 21,900.

    (Pritam Kumar Patnaik is Head Commodities at Reliance Commodities)



    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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