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The Aluminium futures contract on the Multi Commodity Exchange (MCX) continued to remain range-bound for the fifth consecutive week.
Within the range, the contract rose to a high of ₹142.6 per kg on Thursday and fell back sharply to a low of ₹138 the very next day. It has bounced back slightly from there and is currently trading at ₹139/kg.
As has been reiterated over the last few weeks, a breakout on either side of ₹135 or ₹143 will determine the next trend. Traders can stay out of the market until this range breakout indicates a clear trend.
A strong break below ₹135 will turn the outlook negative. Such a break will increase the likelihood of the contract falling to ₹132 or ₹130.
On the other hand, if the contract manages to break above ₹143 decisively, it can gain fresh momentum. Such a break can take the contract higher to ₹145 initially.
A further break above ₹145 will then increase the possibility of the upward move extending to ₹150 and ₹152.
Key resistance pointThe level of ₹143 is a key medium-term trend resistance for the contract. As such, inability to break above this hurdle might keep the contract under pressure and leave it vulnerable to a break below ₹136.
Also since the contract has been on a strong upward move since August, the possibility of a corrective fall from ₹143 in the coming days is high.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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