Comex High Grade Copper Price Futures (HG) Technical Analysis – Market Trading in Game-changing Area

July Comex High Grade Copper futures recovered after early session weakness to close higher for the session. The market slipped early Tuesday amid modest profit-taking in London. Prices were also driven lower by reports that copper exports in China dropped 41 percent, partly due to tighter credit.

Comex High Grade Copper Price Futures (HG) Technical Analysis –  Market Trading in Game-changing Area

Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside with the crossing of a key 50% level. The trend won’t officially turn up until $2.6945 is taken out.

The main range is $2.6945 to $2.4725. Its retracement zone is $2.5835 to $2.6070. This zone is currently being tested.

Trader reaction to the zone will determine the near-term direction of the market. Bearish investors are going to try to form a secondary lower top. Bullish investors are going to try to drive the market through this zone in an effort to make $2.4725 an important main bottom.

Recap

Early in the session, the copper market found support on a price cluster at $2.5835 to $2.5825. The angle at $2.5825 has been guiding the market higher since the May 8 bottom at $2.4725.

We can expect the market to trend higher as long the angle at $2.4825 holds as support. Holding on the strong side of a 50% level at $2.5835 will also help maintain the upside bias.

If this market is going to rally further then we are going to need to see buying strong enough to overtake the Fibonacci level at $2.6070 and the downtrending angle at $2.6145. If this occurs then start watching for strong upside surges.

The key support is the 50% level at $2.5835. Crossing to the weak side of this level especially on a closing basis could lead to a steep plunge with the next potential target angle coming in at $2.6145.

Copper closed at a critical area on Tuesday. Essentially, we need to hold above $2.6070 in order to sustain the rally. A sustained move under $2.5835 will signal the return of sellers and this could be a bearish development.