Failing To Breach A 100 Day EMA MCX Copper Seems To Have Topped Out

Failing economic numbers and slowdown of China has ensured one thing that Copper will remain under a tight scanner of bears until some material event happens. The fundamentals were already quite fragile in this construction and electricity material but now it looks that even the technicals are getting disturbed.
The brief Bull Run that began in May continued till the fortnight, 13 May to be precise. Copper had a opportunity to cross its 100 day Exponential Moving Average at 411.6 but failed to do so making a top at Rs 411.5 per kg.
The prices have sliced since then and have even dropped marginally below Rs 400 mark in the futures markets. Interestingly, Spot markets are carrying a premium of almost Rs 8 over the futures. This means that the prices have turned into backwardation.
Taking into account the Relative Strength Index (RSI) that is at 52 it seems that some more pain in Copper cannot be ruled out. A short Fibonacci retracement line drawn from the close of 1 May i.e Rs 366 to the top at Rs 408 on 13 May 2013 brings levels of Rs 394 and 384 in the counter.
Breaking Rs 389 from the lows will mean disastrous for Copper as prices then can have a freefall with Rs 366 per kg as 100 percent retracement point.
When last seen MCX Copper benchmark futures were trading at Rs 398.9 per kg. Spot prices were at Rs 406.7 per kg on 14 May 2013.

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