The aluminium futures contract on the Multi Commodity Exchange (MCX) fell sharply in the past week. The contract had tumbled 5 per cent during intra-week and made a low of ₹143.95 per kg on Wednesday last week. The contract continues to hover around this support and is currently trading at ₹145.5 per kg.
The crucial support level of ₹144 is holding well and is limiting the downside. Whether the contract manages to sustain above ₹144 or not will decide the next leg of move. If the contract continues to trade above ₹144 and gains momentum, an up-move to ₹151 and ₹152 is likely in the coming days. Inability to breach ₹152 can drag the contract lower to ₹147 and ₹145 levels again. In such a scenario, a range-bound move between ₹144 and ₹152 can be seen for some time. But, if the MCX-Aluminium futures contract breaks above ₹152, there is a strong likelihood of the contract surging to ₹158 or even ₹160 over the medium term.
On the other hand, if the contract breaks below ₹144 in the coming days, an immediate fall to ₹142 is possible. Further break below ₹142 will then increase the likelihood of the contract extending its fall to ₹140.
Traders can stay out of the market until a clear trend emerges.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.