20000109

Comex copper ends on firm note amid fund buying

NEW YORK: Comex copper futures on Friday traded steadily higher all day on active fund buying interest with the active March contract taking a stab at pushing above 86.00 cents.

Traders said producer selling pressure at the top end of the range has been holding prices at bay from crossing the 86.00 mark on a consistent settlement basis.

Key resistance is sitting at 85.70/85.80 cents with the greatest resistance at 86.40 cents.

The active March copper contract closed up 0.10 cent at 85.40 cents a lb, trading between 84.95 and 86.25 cents, just shy of its contract high at 84.60. Spot January also firmed up to end at 84.55 cents a lb, up 0.05 cent.

"The market did retreat. You are getting a little bit overbought and see some selling up at those upper levels," said Scott Meyers, technical analyst with Pioneer Futures.

"It's still in an uptrend but not as bullish as it was on its last leg up."

While the market rallied from its 83.30 cent settlement on December 21 up to 86.30 cents on December 30, selling pressure continues to hold prices rangebound.

"There was no follow through and it couldn't make a new high," said one broker. "When you can't make it, people who are long for the day, two days or a week are going to get flat ahead of a weekend."

Consumer buying in London spurred on a path to the upside with investment funds falling in line. Stops were hit above $1,870, pushing the market up to $1,885. The three-months price closed up $7 at $1,876 a tonne.

Final volumes were estimated at 13,000 contracts. Final volumes Thursday were estimated at 10,000 contracts compared with final estimated volumes on Wednesday of 11,000 contracts.

LME warehouse stocks were down 425 tonnes at 787,975 tonnes in Friday's report. COMEX inventories on Thursday were up 46 short tons at 93,083 tons.

The nine-day relative strength index for March copper moved higher in early buying before some late selling pushed it back to close at 55, nearly unchanged from Thursday's close of 54.

Technical analysts usually interpret an RSI reading at 70 or higher as indicating overbought conditions and a reading at 30 or lower as oversold.-Reuters