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The aluminium futures contract on the Multi Commodity Exchange (MCX) was stuck in a narrow range between ₹147 and ₹152 per kg in the past week. The 100-day moving average support at ₹146.5 has been holding well and has limited the downside all through last week.
A breakout on either side of ₹147 or ₹152 will determine the next trend. Until then the contract can remain range-bound between ₹147 and ₹152.
If the MCX-Aluminium futures contract sustains above ₹147 and breaks above ₹152 decisively, it can gain fresh momentum. Such a break can take the contract higher to ₹155. But cluster of resistances are seen at around ₹155 which may cap the upside in the near term. A break and a decisive close above ₹155 is needed to turn the outlook completely positive. Inability to rise past ₹155 can trigger a pull-back move to ₹152 and ₹150 again. But if the contract breaks above ₹155 decisively, it can target ₹160 or even higher levels.
On the other hand, if the MCX-Aluminium futures contract breaks below ₹147 in the coming days, the downside pressure would increase. Such a break can drag the contract lower to ₹142.5 – the 200-day moving average support level. A strong break below ₹142.5 will then increase the likelihood of the contract tumbling to ₹140 and ₹137.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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