Copper - July 17, 2021 - Reliance Securities

Mr. Sriram Iyer, Senior Research Analyst at Reliance Securities

LME Copper remained range bound this week.

Domestic copper prices also remained ranged bound this week, tracking overseas prices.

Prices initially started amid rising inventories and stronger dollar.

Copper stocks in LME registered warehouses have over the last three weeks climbed nearly 40%.

After the initial fall, prices rebounded from the lows of the week as lower than expected growth from top consumer China strengthened hopes for more support for the world's second-largest economy.

China's growth in the second quarter undershot expectations so monetary policy will probably be more accommodative in the second half the year to support the Chinese economy.

The country's GDP number came in at 7.9% y-o-y for the 2nd quarter marginally lower than expectation of 8.1%. The q-o-q GDP was better than expectations at 1.3% vs. a poll at 1.2% expected and 0.6% in the previous quarter.

Other data was also better than expected with retail sales growing about 12.1% vs. a poll of 11.0% and Fixed Asset investment growing at 12.6% vs. a poll of 12.1%.

Meanwhile, prices also took support after the U.S. Fed chairman Jerome Powell told Congress he saw no need to rush the shift towards tighter post-pandemic monetary policy.

OUTLOOK

The markets could remain range bound next week and will await cues from data and movement of the Dollar.

Home sales, building permits data from the U.S and German PMI number could move the markets next week.

Technically, ME Copper is trading near 21-Daily Moving Average which is placed at $9480 level above which could see a bullish momentum up to $9600-$9800 levels. Support is at $9400-$9280 levels.

On the domestic front, MCX Copper above 723 will continue its bullish momentum up to 733-745 levels. Support is at 725-718 levels.

RECOMMENDATION

Strategy: - Copper July: - Buy on dips near 725.00, Stoploss 720.00 and a Target at 735.00.

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Source : Equity Bulls

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