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The aluminium futures contract on the Multi Commodity Exchange (MCX) was stuck in a narrow range between ₹137 and ₹140 per kg in the past week.
This leaves the immediate outlook unclear for the contract. It is currently poised at ₹138/kg. A breakout on either side of ₹137 or ₹140 will determine the next leg of move.
If the contract declines below ₹137, it can fall to ₹135.5 initially. Further break below ₹135.5 can drag the contract lower to ₹131.5 or ₹131 in the near-term.
The region around ₹131 is a key support which is likely to limit the downside.
A bounce from there can take the contract to ₹135 and ₹137 levels again. But if the contract breaks below ₹131 decisively, the downmove can extend to ₹129 and ₹128 over the short-term.
On the other hand, if the MCX Aluminium futures contract manages to sustain above ₹137 in the coming days and breaks the range above ₹140, the downside pressure may ease.
Such a break can take the contract higher to ₹142. The level of ₹142 is a crucial long-term trend resistance. Inability to break above this hurdle can trigger a pull-back move to ₹140 or even ₹137 again.
But if the contract manages to surpass the hurdle at ₹142 decisively, it can move up to ₹144 initially.
Further break above ₹144 will increase the likelihood of the rally extending to ₹150 levels over the medium-term.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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