Commodity Trading Tips for Copper by KediaCommodity

CopperCopper yesterday traded with the negative node and settled -0.1% down at 405.6 on profit booking after prices rose after it was announced last Friday that automobile sales in Europe rose 1.7% in April, the first growth in 20 months. This raised hopes that sluggish European auto markets are bottoming out after being dragged down by economic recession. Adding to optimism is that University of Michigan preliminary index of consumer sentiment jumped from April’s 76.4 to 83.7 in May, the highest level since July 2007. The Conference Board Leading Economic Index for the US also increased 0.6% in April, beating forecasts of economists and the highest since October 2007. These positive data helped crude oil prices rebound 1% and the S&P rise 0.95%. FCX’s copper ore project at Indonesia’s Grasberg remains idle, helping LME copper touch a high of USD 7,367/mt. On the other hand, upbeat US economic indicators sent the US dollar index up to 84, curbing gains of copper prices. Positive US economic figures eased concerns over slowdown in the world’s largest economy, but also sent the US dollar index higher and raised fear that the US Federal Reserve will end QE3 early. In this contest, LME base metals generally surrendered gains. Gold prices ended in negative territory for seven days in a row, the longest period of decline since March 2009. In yesterday's trading session copper has touched the low of 405 after opening at 405.65, and finally settled at 405.6. For today's session market is looking to take support at 405.1, a break below could see a test of 404.6 and where as resistance is now likely to be seen at 406, a move above could see prices testing 406.4.

Trading Ideas:

Copper trading range for the day is 404.6-406.4.

Copper dropped on profit booking after prices rose after it was announced last Friday that automobile sales in Europe rose 1.7% in April

Adding to optimism is that University of Michigan preliminary index of consumer sentiment jumped from April’s 76.4 to 83.7 in May

Copper weekly stocks at Shanghai exchange came down by 4713 tonnes