Base metals - Trading techniques:

Copper, Aluminium and Nickel investing strategists 
Base metals have been under pressure since past two months. All base metals have been trading in red and they were expected to consolidate this week before US-China trade talks.

Looking at LME and Shanghai Futures Exchange, base metals were seen trading in green. On Monday, Asian Equity market were trading in green. We also saw a sharp uptrend in Rupee around 69.29 which was a surprise for most analysts.

Dollar index was under pressure and was seen trading at 95.94. A good US employment data released last Friday support the rebound in the prices across the board.

Looking at individual base metals


Last week we saw copper trading around 397 on MCX and traders were expecting the price to touch 393.

Monday morning, there was a little support and copper prices were seen trading around 410. With recent news on US-China trade war, investors did show support and we saw buyers coming in support of the metals

China's foreign ministry said on Monday that both Beijing and Washington had expressed a will to work together in order to implement a consensus on trade. Read more

Based on another report from S&P Global Platts released during the weekend, Global financial institution Goldman Sachs forecasts copper prices on the London Metal Exchange will hit $7,000/mt in 2019 despite weak prices at the start of the year. We saw buyers entering the market with some confidence.

I believe Copper futures could be seen trading in range for upcoming sessions. Mostly between 405 to 425 on MCX this week

For intraday, buy copper at 410, 412 for target of 420 and SL of 406.

Positional traders can enter the market at the current rate or wait for 410. Copper is expected to hit 430 in coming few months. (Things could change if US-China trade talks get delayed or postponed)


Base metals on LME were mostly trading on higher due to continuous weakness in the dollar index.

Risk sentiment continues to build on Friday's rebound, driven by stronger-than-expected employment data from the United States, optimism over US-China trade negotiations and further monetary stimulus after the People's Bank of China announced it will cut banks' reserve requirement ratio by 100 basis point from mid-January.

LME nickel stocks are trending lower - at 204,852 tonnes, they are down from 218,868 tonnes at the end of October.  

There could be some upside, however, because Chinese authorities have announced new investment in railway infrastructure to help combat slowing domestic economic momentum.
Expect Nickel to continue uptrend. For intraday, I would suggest buying Nickel at 770 for target of 810 with SL of 740.
Most traders have shown interest in Nickel since demand is expected to grow.


Aluminium will follow a slightly different trajectory compared to other metals this week. We could see a range bound trade.

I would recommend being on the buy side and enter the market at low levels. Aluminium inventories are growing and demand has been low. Would recommend entering market at 128 for target of 131 with SL of 126.

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