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Comex copper bounces off lows to firm close

NEW YORK: Comex copper futures managed to continue bouncing higher to a firm close on Friday after three sessions of selling threatened prices lower.

Light fund selling started the day but 81.25 cents in the March contract brought in good trade and consumer buying interest.

"I think the short-term technicals probably got a little overdone this week so you're going to get a profit-taking rally on a day like today," said one broker. "For the short-term, there may even be some buying opportunities here."

At least one floor trader was a bit more cautious, suggesting that there could still be more selling next week despite the 81.10-81.60 gap being filled.

March copper ended up 0.20 cent at 82.75 cents a lb after trading 81.25 to 82.90 cents. Spot February finally woke up to garner light interest and end up 0.20 cent at 82.35 cents.

May copper also closed on a firm note at 83.75 cents, up 0.15 cent. "The funds still have long positions in March. You're going to see that March-May spread and that's just because (funds) are selling March to buy May or vice versa," said the broker. "There's certainly more activity in the May and it should at this point in the month."

In London dealings, copper slipped lower in early trading, nearly threatening a move through its $1,800 support level. The three months price ended up $1 at $1,818 a tonne.

LME warehouse stocks fell 400 tonnes on Friday to stand at 803,725 tonnes. Comex stocks were up 47 short tons at 95,933 tons on Thursday.

Technically, traders are eyeing support 81.25, followed by 80.50 in the March contract with no significant stop loss orders in the near vicinity. Nearby resistance is pegged at 83.70/90 cents.

"There are really no stops on the downside. All the longs got cleaned out in the last couple of days," observed one trader.

Estimated Comex volume Friday reached 18,000 contracts, compared with an official turnover on Thursday 10,871 contracts, and official volumes of 23,524 on Wednesday.

The nine-day relative strength index for March copper eased up into neutral conditions at 41, from a nearly oversold 31 on Thursday.

Technical analysts usually interpret an RSI reading of 70 or higher as indicating overbought conditions and 30 or below as oversold.-reuters