The price of Copper was consolidating within a broad range of Rs 438 to Rs 428 levels over the past 3-4 sessions of trade after it witnessed a strong rally from the lows of Rs 399.70 as on 23rd June,2011.But, the key observation to be made is that the price action of copper within this consolidation range was taking the shape of a bullish pennant formation and the price gave a strong breakout backed by robust volumes from the pennant during yesterday’s session.
The Pennant price pattern is a continuation pattern and suggests the stock, has gained momentum for a fresh up move after a small consolidation. The RSI indicator is also trading in bullish mode and the price of copper is also sustaining above its key moving average clusters. Thus the current technical setup augurs well for the future price movements of copper.
We recommend traders to buy 50% at current levels and again on dips to Rs 438.50--Rs 437 levels with a stop loss placed below Rs 433.40 levels upside targets of Rs 444.75 / Rs 447 levels expected to be achieved over the upcoming 3-4 sessions of trade.
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