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The aluminium futures contract traded on the Multi Commodity Exchange (MCX) continues to remain range-bound and mixed for the fourth consecutive week.
The sideways consolidation in the range between ₹115 and ₹119 per kg remains intact.
The contract is currently hovering around the lower end of this range at ₹115.25.
Whether the contract manages to sustain above ₹115 or breaks below it will decide the next leg of move.
Traders can stay out of the market and wait for a clear trend to emerge for taking trade positions.
A bounce in the coming sessions will see the contract retaining its ₹115-₹119 range for some more time. In such a scenario a rise to ₹119 is possible in the coming days.
If the contract manages to break the range above ₹119, the up move can extend to ₹122 and ₹123. Only a strong break and a decisive close above ₹123 will bring fresh bullish momentum in the contract.
On the other hand, if the contract fails to sustain above ₹115/kg and breaks below this support, a fall to ₹114 or even ₹113 is possible.
The region below ₹114 and ₹113 is a key support zone which may limit the downside in the short term.
But a strong break below ₹113 will bring renewed pressure on the contract. Such a break can drag the contract lower to ₹110 or ₹109.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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