Comments
The aluminium futures contract traded on the Multi Commodity Exchange (MCX) has recovered smartly in the last two weeks. The corrective fall from the August high of ₹129 per kg found a bottom at ₹116 in early October. The rally from this low signals the beginning of a new leg of the up-move for the contract. This gives short-term traders a good opportunity to initiate fresh long positions in the contract.
Short-term viewThe short-term outlook is bullish for the MCX-aluminium futures contract. The contract has consolidated and formed a strong base between ₹116 and ₹120 between end September and mid-October. This adds strength to the recent rally that has been in place from the low of ₹116.3. Key short-term supports for the contract are at ₹120 and ₹118. Immediate resistance is at ₹123.5. There is a strong possibility of the contract breaching this hurdle and rising to ₹125 and ₹128 in the coming days.
Traders with a short-term perspective can go long with a stop-loss at ₹119 for the target of ₹127.
The pattern of the 21- and 100-day moving average on the charts suggests that a fall below ₹120 is less likely. So any intermediate declines to ₹120 if seen can be used to accumulate long positions.
The outlook will turn negative only if the contract records a strong close below ₹120. Such a break can drag it lower to ₹116 once again.
Medium-term viewThe medium-term trend is also up for the MCX-aluminium futures contract. But, important resistance is coming up at ₹129. A rise to test this level is likely in the coming weeks. However, the contract has to breach this hurdle in order to extend its uptrend. Inability to break this resistance and a reversal from here will keep the contract under pressure for a fall to ₹116 or even lower.
On the other hand, a strong break above ₹129 will keep the medium-term uptrend intact. It will result in the recent rally extending to the next target of ₹135.
(Note: Price as of 6 pm on Tuesday. The recommendations are based on technical analysis. There is a risk of loss in trading.)
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.