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Aluminium futures contract on the Multi Commodity Exchange (MCX) has been stuck in a sideways range between ₹135 and ₹143 a kg for more than six weeks now.
At ₹141, the contract is currently trading near the upper end of the range.
A breakout on either side of ₹135 or ₹143 will determine the next leg of the move.
As reiterated last week, traders can stay out of the market. They can wait for the range breakout to get a clear cue on the next trend and also a confirmed trade signal.
A test of ₹143 is likely in the near-term. Inability to break above this hurdle will keep the sideways range intact. In such a scenario, the contract can fall back to ₹137.
But if the contract manages to break above ₹143, it can test ₹145 initially.
Further break above ₹145 will boost the momentum and increase the possibility of the upmove extending to ₹150 or even higher thereafter.
On the other hand, if the contract breaks the current range below ₹135, it can come under renewed pressure.
It will turn the outlook negative and drag the contract lower to ₹132 or ₹130.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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