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Sell Copper Long Term: Motilal Oswal

ByCommodityOnline
Published 12/19/2013, 06:32 AM
Updated 05/14/2017, 06:45 AM

Copper may be facing down side according to Kishore Narne, Associate Director Head - Commodity & Currency, Motilal Oswal Commodity Broker Pvt Ltd.

He has advised to SELL MCX COPPER FEB AT 458.5-460, TARGET 451-448, SL 465 primarily because of the following reasons :

From the start of 2013, copper prices have dropped significantly as concerns over increasing supply, rising inventories and the confusion over Fed’s tapering decision had held market beliefs.

The concerns over supply continue to surround copper prices going into next year, keeping copper prices subdued. Adding more strain on prices now is Fed’s latest tapering decision as its starts to unwind its extended stimulus which had fuelled the rise of commodity prices. The start of the tapering means less liquid money in the markets which used to be routed to commodities, thus turning down the bullish sentiment.

While we have seen some demand picking up from China with a drop in inventories on the LME, the end of the restocking season in China could see demand faltering soon. We expect Copper to trade lower in the coming days, especially as we enter the week of festivities across the globe with less liquidity in the markets.

Copper on the LME is struggling to break above $7300 and hold, after the recent run up from $6910. Most of the positives have been factored in, and a cool off in prices can be seen before the year end.

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