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The copper market remains vulnerable to further corrective action unless the US equity market manages to totally shake off the negative sentiment that was present at the end of last week. However, with the Chinese copper market managing a bounce last night and the weekly Shanghai copper stocks last week showing a moderate decline, the copper market should be able to find some fundamental support for prices at slightly lower levels. On the other hand, with choppy equity market action, expectations of weak US economic readings today and another significant rise in daily LME copper stocks seen overnight, the bear camp in copper does seem to maintain an edge into the early Monday trade.
We see initial support and a potential target in December copper down at $3.0515, with similar support in March copper seen down at $3.0775. In fact, with news of rising Chinese copper production seen overnight and a series of slack US NAPM readings also due out this morning, we have to give the bear camp the initial edge this morning.
