K The aluminium futures contract on the Multi Commodity Exchange (MCX) fell initially in the past week from ₹142 per kg to make a low of ₹138.4 on Thursday last week.

The contract has been broadly range-bound between ₹136 and ₹144 for more than two months. Within this range, it is currently poised around the mid-point of this range at ₹140 per kg. The contract has been oscillating around ₹140 over the last few days.

Immediate support is at ₹138 – the 100-day moving average. If the contract sustains above this support and manages to breach ₹141, a rise to ₹143 or ₹144 is possible in the coming days. A strong break and a decisive close above ₹144 will mark the end of the prolonged sideways consolidation. Such a break will boost the bullish momentum and will trigger an up move targeting ₹150 in the coming weeks.

On the other hand, if the contract breaks below the immediate support at ₹138, it can fall to ₹136 – the lower end of the range. A bounce from ₹136 will keep the sideways range intact and take the contract higher to ₹140 or even higher levels thereafter. But if the contract breaks below ₹136 decisively, it can come under fresh pressure. Such a break will drag the contract lower to ₹132 on the back of profit booking. This down move could be swift as the contract has been stuck in a broad sideways range for a prolonged period of time.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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