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The resistance in the ₹147-₹148 per kg region is holding well for the Aluminium futures contract on the Multi Commodity Exchange (MCX).
The contract touched a high of ₹146 per kg on August 13 and came off from there to a low of ₹140.85 last Friday. The contract has, however, bounced up slightly from those lows and is currently trading at ₹143 per kg.
The near-term view continues to remain mixed. A key support is at ₹138 and the resistance is in the ₹147-₹148 region. The contract can continue to trade sideways in the band between ₹138 and ₹148. A breakout on either side of ₹138 or ₹148 will then decide the next move.
A strong break above ₹148 will ease the downside pressure. Such a break will take the contract higher to ₹151 or ₹153 immediately. A further break above ₹153 will then pave the way for the next target of ₹158 over the short term.
On the other hand, if the contract fails to gain momentum from current levels and declines below ₹138, the downside pressure will intensify. In such a scenario, the contract may come under fresh selling pressure and the downtrend that has been in place since April will resume. In such a scenario, the break below ₹138, will then increase the likelihood of the contract tumbling to ₹132 or ₹130.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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