Commodity Calls

MCX-Aluminium may remain range-bound

Gurumurthy K BL Research Bureau | Updated on January 11, 2018 Published on July 24, 2017

The Aluminium futures contract on the Multi Commodity Exchange is stuck in a narrow range between ₹121.45 a kg and ₹123.5. Within this range the contract is currently trading at ₹122.20 a kg. The immediate outlook is not clear.

The 200-day moving average is acting as a support at ₹121.3, while the 100-day moving average is a resistance at ₹123.65. The contract may remain range-bound between the support and resistance. A breakout on either side of ₹121.3 or ₹123.65 will determine the next trend.

A break below ₹121.3 can take the contract lower to ₹119.85 initially. A further fall below ₹119.85 can then drag the contract lower to ₹118.75 or ₹118.50. On the other hand, if the MCX-Aluminium futures contract breaks above the 100-day moving average hurdle at ₹123.65, it can rise to ₹125.35 or ₹126. If the contract manages to rise past ₹126 decisively, it can gain momentum. Such a break will increase the likelihood of it going to ₹127.8 thereafter.

Traders can wait for the contract to breakout on either side of ₹121.3 or ₹123.65. Long positions can be initiated if the contract breaks above ₹123.65. A stop-loss can be placed at ₹122 for the target of ₹127. Revise the stop-loss to ₹124 as soon as the contract moves up to ₹125.

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Published on July 24, 2017
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