The Aluminium futures contract on the Multi Commodity Exchange (MCX) has reversed sharply higher in the past week. The contract made a low of ₹131.5/kg on September 15 and surged from there to make a high of ₹141.4 on Thursday. The contract has come off from this high and is stuck in a sideways range between ₹136 and ₹140 since Friday. It is currently trading near ₹139 a kg.

Support is in the ₹136-135 region. The outlook will remain positive as long as the contract trades above this support zone. A rise to ₹142 is likely in the near-term. Inability to break above this hurdle can take the contract lower to ₹136 again. But if the MCX-Aluminium futures contract manages to surpass the resistance at ₹142, the upmove can extend to ₹145.

Short-term traders with high risk appetite can make use of dips to go long at ₹136. Stop-loss can be placed at ₹134 for the target of ₹140. Revise the stop-loss higher to ₹137 as soon as the contract moves up to ₹138.

The contract will come under pressure if it declines below ₹135. Such a break can take the contract lower to ₹131 initially. Further break below ₹131 will increase the likelihood of the fall extending to ₹128 thereafter. But the bias on the chart is bullish in the near-term and a fall breaking below the support at ₹135 is less likely.

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

Related Topics
comment COMMENT NOW