The aluminium futures contract on the Multi Commodity Exchange (MCX) has been in a medium-term sideways consolidation phase in the band between ₹136 and ₹145 a kg since late December 2017. Within this range, the contract has an immediate resistance at ₹143, which has been limiting the upmove over the last two months.
Last week, the contract tested this resistance and fell by 1 per cent to ₹140.1 a kg. On Monday, it started on a flat note and traded at ₹140.8. The contract currently tests its immediate support at ₹140. A strong decline below this base level can pull the contract down to ₹136, which is a vital support for the contract. Any further plunge below this will alter the sideways movement and drag the contract down to ₹134 and then to ₹131 in the short-term.
Traders with a short-term perspective should tread with caution as long as the contract moves sideways in the aforementioned band. An upward breakthrough of ₹143 can strengthen the uptrend and take the contract higher to ₹146 and then to ₹150 in the short-term.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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