Technical Analysis

MCX-Aluminium continues to stay flat

Akhil Nallamuthu BL Research Bureau | Updated on April 20, 2020 Published on April 20, 2020

The April futures contract of Aluminium mini, that is, Alumini on the MCX has been in a sideways trend for a month. The contract has been oscillating between ₹132.6 and ₹135.2.

For the year, the contract has softened by about 2.2 per cent and is currently trading near the lower boundary of the consolidation range. As long as the contract fluctuates within these levels, the next leg of trend cannot be confirmed.

Following the price action of the contract, the RSI and MACD indicator on the daily chart stays flat. But the RSI is below the midpoint level of 50 and the MACD is in the negative territory. Also, the price remains below the 21-DMA. These factors signal a bearish bias.

If the contract breaches the lower limit of the range at ₹132.6, it might retest the previous low at ₹128.2. A break below that level can drag the contract to ₹125. On the other hand, the upper boundary of the range, that is, ₹135.2 along with the 50-DMA at ₹136.3 has formed a resistance band. If the contract manages to breakout of these levels, it can rally to ₹140. Subsequent resistance is at ₹143.7.

On the global front, the price of three-month rolling forward contract of primary aluminium on the London Metal Exchange has been gradually recovering over the past week. The price has moved above the important level of $1,500. If the contract can sustain at these levels, the price might rise further. But if the contract resumes downswing on the back of the major downtrend, it can weigh on the MCX contract as well.

Trading strategy

The futures contract in MCX continues to chart a sideways trend. So, traders are recommended to hold back fresh positions until price remains within ₹132.6 and ₹135.2. Traders can sell the contract if it slips below ₹132.6; place stop-loss at ₹135.2.

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

Published on April 20, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.