Copper: Support 6350 – 6950 – 7250 Pivot 7560 Resistance 7850 – 8150 – 8750
Copper: The head-and-shoulders pattern is one of the most popular and reliable chart patterns in technical analysis. And as one might imagine from the name, the pattern looks like a head with two shoulders. Head and shoulders is a reversal pattern that, when formed, signals the security is likely to move against the previous trend. There are two versions of the head-and-shoulders pattern. The head-and-shoulders top is a signal that a security's price is set to fall, once the pattern is complete, and is usually formed at the peak of an upward trend. The second version, the head-and-shoulders bottom (also known as inverse head and shoulders), signals that a security's price is set to rise and usually forms during a downward trend.
Looking at the chart of Copper it has started its rally from 2800 and after testing the higher level of 7950 short correction was seen forming the left shoulder and tested the support of 6000 level. There after the rise which was seen crossed the higher level of 7950 and move further upside where 10150 were tested. There after reversal for the higher level again it has taken support at 6610 level and formed a neck line where shot bounce which was expected has been seen and tested the higher level of 8150 level. Further we are looking the formation of the Right Shoulder where short term top is expected to be posted and will move to test the Neck Line which comes at 6650 level and once this support of 6650 and sustain trading below 6600 will confirm the down trend where its next down side target will be the previous bottom of 2800 around. If we look at the Fibonacci Expansion of point a-b from point c which comes to 5400 which is 100% and 4850 comes to 121% level will be the immediate target where it may get halt for some time before the next round of selling which may be seen after short bounce. We are on the over view where the lower side bottom may be seen at 4850 level and after testing the same further trend will be clear rather it will move to test 2800 or price may revert from the lower level of 5400 or 4850 level around.
Prepared By: Rajeev R. Darji
Sr. Research Specialist
XTB India
