Comments
MCX-Aluminium (₹141.7)
The August futures contract of Aluminium on Multi Commodity Exchange (MCX) is in a short-term uptrend. But, the contract currently tests a key resistance at ₹142. Since early June this year, the contract has been broadly consolidating sideways in the band between ₹137 and ₹142. To decide the next leg of the trend, the contract needs to decisively move out of this range on either side.
An upwards breakthrough of ₹142 will pave way for an up-move to ₹145 and then to ₹150 over the medium term. If the contract fails to move beyond ₹142, the sideways movement will remain in place for a while. The Relative Strength Index (RSI) on the daily chart is hovering in the neutral region.
On the downside, a strong plunge below ₹137 will bring back bearish momentum and pull the contract down to ₹134 and then to ₹132. Next key support is at ₹130.
On the global front, the price of three-month rolling forward contract of primary aluminium on London Metal Exchange (LME) has been in a medium-term uptrend since mid-May this year.
Also, the short-term trend is up, while trending up the contract had breached a key barrier at $1,660 recently. It faces a key resistance ahead at $1,700; a breakout can take the contract higher to $1,750 over the medium term. Supports are at $1,660 and $1620.
Trade strategy
The MCX contract is range-bound with an upward bias; the global price trend of LME contract can drive it higher. That said, the MCX-Aluminium has a vital resistance at ₹142. Hence, traders can initiate fresh long positions on a decisive break ₹142 with a stop-loss at ₹139.
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.