Copper is firmly trading below the downward trend line and this confirms that the trend is towards the downside. As long as we stay below this trend line, the bears will stay in control of the price action. However, a meaningful support area is not far enough which starts from 1.9651 -1.888. If we break the support of 1.888 this will open the floor towards the next major support area which is at 1.5680.
The RSI, which is a famous momentum indicator and technicians do buy and sell the derivative based on its extreme reading has crossed below the level of 20. The reading of 30 is considered as extreme oversold reading. Hence, look at the indicator very carefully as we approach towards our first support zone and if the RSI shows that the momentum is slowing down, that could be an opportunity to bag the bottom.
Disclosure and Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.
by Naeem Aslam