Copper prices remain stable, though the outlook is tarnished by subdued economic data from China

FUNDAMENTAL OVERVIEW:

In the realm of industrial metals, copper prices experienced a modest increase on Tuesday, fuelled by positive sentiments about heightened demand and a more constrained copper market in 2024. However, this optimism was dampened by data from China, indicating ongoing economic challenges in the largest global copper importer.

Copper futures set to expire in March saw a 0.2% increase, reaching $3.8973 per pound, following a 2.1% rise in 2023.

China’s official Purchasing Managers’ Index (PMI) data revealed that manufacturing activity contracted more than anticipated in December, while non-manufacturing activity hovered near the contraction threshold.

Despite indications of resilience in the manufacturing sector from a private survey, growth remained subdued. Employment and inflation also showed no signs of improvement in December.

The data suggested that business activity in the leading copper-importing country remained sluggish, potentially impacting copper demand in 2024.

However, red metal prices are anticipated to gain from rising demand for electric vehicles and green energy, coupled with expectations of supply tightening due to significant mine closures in Peru and Panama.

COPPER TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

Copper is currently trading within an up channel.

Copper is positioned above 20&50 in the Moving Average (SMA).

The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a neutral trend.

Immediate Resistance level: 3.895

Immediate support level: 3.813

HOW TO TRADE COPPER

After a notable ascent, copper prices experienced a decline and entered a downward channel. Eventually, it found support and established a double-bottom pattern, prompting an upward movement. Currently, copper is trading near a crucial resistance zone, and a breakthrough could lead to further upside potential.

TRADE SUGGESTION- STOP BUY– 3.929, TAKE PROFIT AT- 4.025, SL AT- 3.873.