Comex High Grade Copper Price Futures (HG) Technical Analysis – Best Value Zone $2.9150 to $2.8525

December Comex High Grade Copper futures closed higher on Monday. Traders in New York basically followed the rise in London copper. It’s early, but the price action may be an indication that the short-term correction is over at least temporarily.

Prices fell sharply last week after inventories in LME-registered warehouses registered their biggest weekly inflow since May, rising 67,600 tonnes to 276,025 tonnes. This may have encouraged hedge fund liquidation and the rout was on.

Prices were also pressured last week by disappointing data from China including its slowest growth in investment in nearly 18 years. Bearish traders read this to mean the world’s second-largest economy is finally starting to lose some momentum as borrowing costs rise.

Bullish traders believe Chinese demand is likely to improve because downstream manufacturers have started to restock. This could lead to a drop in inventories.

If Chinese demand improves, but growth slows, then prices could become rangebound over the near-term.

The main trend is up according to the daily swing chart. It will change to down on a trade through $2.8935. This is followed closely by the next main bottom at $2.8795. This is a potential trigger point for an acceleration to the downside.

The main range is $2.6510 to $3.1785. Its retracement zone at $2.9150 to $2.8525 is the primary downside target. Since the trend is up, watch for buyers to show up to defend the uptrend.

The new short-term range is $3.1785 to $2.9310. If there is a rally then its retracement zone at $3.0550 to $3.0840 will become the primary upside target.

Traders who believe demand will improve are likely to step in on a test of $2.9150 to $2.8525. However, gains may be capped at $3.0550 to $3.0840 by traders looking for slower growth in China. This is how copper could become rangebound over the near-term.