On Thursday, Jul 11, 2024, Copper broke down from a descending triangle pattern on C5 (2 H candlestick from 5 PM to 7 PM IST) forming a Big Red below Support (Bearish Setup 3) . The price expanded nicely over the next 2 candles making it a winning trade.
The next day, the price opened with a gap down, took support at the neckline of the previous rounding bottom and turned back with a massive green candle on C3 that closed above the gap resistance. C4 was a small green candle thus completing our Bullish Setup 3 - Big Green above Resistance, the bullish version of the setup from the previous day. The price then expanded throughout the remaining part of the day over the next 4 candles, gaining by more than INR 10, meeting all daily targets.
The price action has formed a Bullish Engulfing candle on the daily charts, which affirms that the drop on Thursday was only a reaction to test the neckline support before Copper reverts to its long term bullish trend on the daily and weekly charts.
(Fig 1.1 - Breakdown from a Descending Triangle that tests the support and bounces back sharply the next day on Copper Futures)
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