Sunday 3 May 2015

Copper: On The Verge Of Another Break Out ? Target 3.15-3.45-3.60 Or Again 2.64-2.42 Range ?








Technically, Copper (CMP: 2.93) has to sustain above 2.95 for an immediate target of 3.12-3.15-3.20. In the near term, consecutive closing above 3.20 zone it may target 3.45-3.60.

On the flip side, immediate support is 2.91 zone & sustain below that Copper could fall to 2.83-2.78-2.72-2.66 area. Consecutive closing below 2.66, it may fall to 2.60-2.52-2.42 in the near term.

Bottom Line (Positional Cyclical Trading Levels):

2.42-2.52-2.60-2.66-2.72-2.78-2.83-2.91-2.95-3.05-3.12-3.20-3.35-3.45-3.60

For the last few trading sessions, Copper jumped for renewed hopes for China stimulus. As we are all aware that Copper is a key industrial metal used widely from houses to electronics & China, being the "Power House" of our global economy, consumes nearly 40% of global demand. "Dr.Copper" is also viewed as a key barometer & key beneficiary of economic growth and any uptick in Chinese economic activity is viewed as a bullish driver or vice-verse for the market. 

Going ahead, China may aggressively protect its new normal GDP growth of around 7% after so called soft-landing or rather than cool down from its high double digit growth by continuous targeted mini stimulus without going for any big-bang QE type of stimulus in order to keep equilibrium in its economy. In any case, China may not let down its GDP to drift below 7% level as its big brother neighbour, India is also projected to rise around 7.5% GDP in the coming days.

Also, worst may be over from global economy and gradual industrial & infrastructure recovery/addition might be seen in the days ahead, with US/EU/JAPAN in the fore front apart from China. India is also in the "bright spot" for the expected infrastructure boom & "Make In India" initiative. Demand for Copper from Nepal, (which is nearly destroyed as a result of recent awful earthquake) may increase as the country will need new earthquake resistant infrastructure & buildings.

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