Comex High Grade Copper Futures (HG) Technical Analysis – February 5, 2015 Forecast

March Comex High Grade Copper futures are trading lower as short-sellers returned following the market’s inability to breakout over the last swing top at 2.6360 and turn the main trend to up on the daily chart. In addition, some of the speculators who bought earlier in the week in anticipation of a stimulus announcement by China may have also decided to take profits while waiting for the actual news.

The key resistance that stopped the rally on Wednesday, drops in at 2.6050 today. The market also took out the steep support angle at 2.5790. Both of these factors contributed to the sell-off.

Overcoming 2.6050 will be a sign of strength. Taking out this level with conviction could trigger a change in trend on a move over 2.6360. The daily chart opens up over this level with the major 50% level at 2.6620 the next key upside target.

The short-term range is 2.4190 to 2.6185. The current downside momentum suggests that its 50% level at 2.5175 is the next target. This is followed by the uptrending angle at 2.4990 and the Fibonacci level at 2.4950.

The test of 2.5175 to 2.4950 is important because the first rally may have cleared out the short-sellers. A successful test of the retracement zone will mean that buyers are coming in to support the market. They are the traders counting on China to announce new stimulus.

A failure at 2.4950 will indicate that the market is still in the hands of strong sellers.