The Aluminium futures contract on the Multi Commodity Exchange (MCX) has risen in the past week. The contract surged about 6 per cent intra-week from its low of ₹138.6 per kg and made a high of ₹147 on Thursday last week. The contract has come-off from this high and is currently trading at ₹145/kg.
However, the near-term view remains mixed. A key resistance is in the ₹147-₹148 region and support is at ₹138. The contract can remain range-bound between ₹138 and ₹148. A breakout on either side of ₹138 and ₹148 will then decide the next move.
If the contract manages to breach ₹148 decisively, it can move up to ₹151 or ₹153 in the near-term. Further break above ₹153 will boost the bullish momentum. Such a break will then increase the likelihood of the contract rallying to ₹158 over the short-term. On the other hand, if the contract continues to trade below ₹148, a dip to ₹140 or ₹138 can be seen again in the near-term. A strong break below ₹138 will bring renewed pressure and will also attract fresh selling interest. Such a break will drag it lower to ₹132 or ₹130.
Trading strategy
Traders who have taken short positions at ₹144 and at ₹146 can hold it. Retain the stop-loss at ₹149 for the target of ₹134. Revise the stop-loss lower to ₹143 as soon as the contract moves down to ₹141.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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