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Copper: Is it the arrival of a king?

Copper August Copper

CMP: ` 405.65 (As on 02nd Aug 2017)

Buy: > ` 415

Targets: ` 448 - 479

Stop loss: < ` 392 consolidation mode for a brief period, shaping up
pattern further into insider pattern. The rally seen
Copper, once touted as the ‘king of base metals’ in last two months has repositioned copper near the
saw a major downturn in the year 2014 and 2015. top of the insider candlestick pattern and it seems
The decline actually started during the last quarter that the right time has arrived for a big breakout. The
of 2013 after reaching an all time high of Rs 512 in expected breakout has the potential to take prices
August, the same year. A glut of inventory kept near all time high. Momentum indicators are also
copper under consistent pressure for next two years, supporting the continuation of the bull rally with
making prices tumble more than forty two percent their toned position and free space for further rise.
during the above time frame. It was in 2016 when
the chief metal consolidated strongly and gave We recommended buying in Copper August
first signs of a bullish reversal in November when contract above Rs 415 for targets in the range of
it rallied more than twenty one percent. This was a Rs 448-479. Maintain stop loss below Rs 392.
major turning point which has pushed Copper to
the present scenario when it is very near to a big
breakout to reclaim its lost glory.

On monthly chart, we can see that the three year long
correction plus consolidation phase is captured in
a channel. In November 2016, a strong breakout of
this channel pattern turned heads and rekindled the
interest of traders and investors in copper. However,
after the huge breakout, prices went back into the

7 ARIHANT CAPITAL ¡ AUGUST 2017