Commodity Calls

MCX-Aluminium is stuck in a narrow range

Gurumurthy K | Updated on January 09, 2018

BL20-ALUMINIUM





The Aluminium futures contract on the Multi Commodity Exchange is stuck in a narrow range between ₹131 and ₹135 a kg for more than a week now. This leaves the immediate outlook unclear for the contract. A breakout on either side of ₹131 or ₹135 will determine the next trend for the contract. Traders can stay out of the market until the range breakout gives out a clear trade signal.

If the contract breaks below ₹131 decisively, it can come under pressure. Such a break can trigger a sell-off on the back of profit booking. Since the contract has risen sharply in a short span of time, such a break can drag it to ₹128 initially. Further break below ₹128 will increase the likelihood of the contract extending its fall to ₹125 or ₹124. Short-term traders with high risk appetite can go short if the contract breaks below ₹131 decisively. Stop-loss can be placed at ₹133 for the target of ₹128. Revise the stop-loss lower to ₹130 as soon as the contract moves down to ₹129.

On the other hand, if the MCX-Aluminium futures contract manages to sustain above ₹131, it can continue to remain range bound between ₹131 and ₹135 for some more time. An eventual break above ₹135 will then pave way for a fresh rally to ₹140 or even ₹145 over the medium-term.

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

Published on August 28, 2017

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor