By Deepak Rangan
MCX copper prices have whipsawed its way above Rs 425 but its inability to break through the resistance around Rs 435 brings the possibility of a price decline to the fore.
The China market - China's January copper imports were more than 15% below its Dec 2011 imports. Though, analysts seem to discount the event, the fact that Chinese inflation for January rebounded to 4.5% makes a case for reduced imports since high inflation will probably force the central bank to keep interest rates high and thus put pressure on business growth. Inventories are also reported to be quite high and as such, imports are expected to ease in the coming months. Analysts are also predicting the property market and the home appliance sector to cool down in coming months.
Technically, Prices seem to respect the resistance level around Rs 435. Support is seen at Rs 410 (blue line in chart below). A break below Rs 410 could initially target Rs 380 and then Rs 350, provided fundamentals are negative for the metal.
