Aluminium poised near the range resistance

MCX-Aluminium (₹111.75)

The MCX-Aluminium future continued to trade within the ₹97-₹112 range for the sixth consecutive month. It is currently poised near ₹112; the upper end of the range. If the contract reverses lower from here, it can then fall to ₹105 and ₹103 in the coming weeks. On the other hand, a strong break above ₹112 can take the contract higher to ₹115, which is a key long-term resistance. A strong break and a decisive weekly close above ₹115 will reduce the possibility of a fresh fall . Such a break can take the contract higher to ₹120 or even ₹125 over the medium term. But, inability to break above ₹115 can drag the contract lower to ₹112. If the contract manages to sustain above ₹112, a sideways move between ₹112 and ₹115 is possible for some time. But a strong break below ₹112 will increase the downside pressure and pull the contract lower to ₹110 and ₹108 thereafter.

Outlook is bullish for copper

MCX-Copper (₹333.15)

The psychological support at ₹300 limited the downside in the MCX-Copper future last month. The contract fell to a low of ₹298, but the sharp reversal from around ₹300, every time since February, indicates strong buying interest around this level. The resistance at ₹340 is likely to be tested in the near term. A strong close above the 55-week moving average at ₹328 last week has increased the possibility of the contract breaking above ₹340 . Such a break can take it higher to ₹346 . Further break above ₹346 will make the contract rise to ₹358. On the other hand, if the contract fails to break above ₹340 and reverses lower, it can then remain range-bound between ₹300 and ₹340 for some more time.

Traders with high risk appetite can go long at current levels. Stop-loss can be placed at ₹315 for the target of ₹356. Revise the stop-loss higher to ₹328 as soon as the stock moves up to ₹340.

Lead ready to test key long-term resistances

MCX-Lead (₹125)

The MCX-lead future surged 7.8 per cent last week breaking above a key resistance at ₹121 and is gaining momentum. This resistance level capped the upside in the contract over the last three months. The region between ₹122 and ₹120 will now be a strong support . An immediate rise to ₹129 and ₹131 is possible. Short-term traders can make use of dips to go long near ₹122. Stop-loss can be placed at ₹119 for the target of ₹128. The levels of ₹129 and ₹131 are important long-term resistances for the contract. Inability to break above these resistances and a subsequent reversal from there can drag the contract lower to ₹125 or even ₹120 thereafter. On the other hand, if the contract manages to break above ₹131 decisively, the rally can extend to ₹135 or ₹138. On the charts, the possibility of the contract breaking above ₹131 remains high as long as it trades above ₹120.

Nickel breaks above a consolidation range

MCX-Nickel (₹671.1)

The MCX-Nickel futures contract skyrocketed 10 per cent last week. This rally has helped the contract break above a key resistance at ₹645 per kg. . However the contract has another key resistance near current levels at ₹675. A strong break above ₹675 can take it higher to ₹715 . A strong break above ₹715 will open doors for a further rally to ₹750 thereafter. On the other hand, if the contract fails to break above ₹675 and reverses lower, a near-term pull back move to ₹650 or ₹645 is possible. A break below ₹645 looks less probable. A subsequent reversal from ₹645 will then increase the possibility of the contract breaking above ₹675. Traders with a medium-term perspective can make use of dips to go long near ₹650. Stop-loss can be placed at 605 for the target of ₹735. The contract will come under pressure only if it declines below ₹645 decisively. In such a scenario, it can fall to ₹590 or even ₹560.

Uptrend is intact in Zinc

MCX-Zinc (₹144.35)

The uptrend in the MCX-Zinc futures, which has been in place since the January low of ₹96.65, remains intact. The contract surged 5.3 per cent last week. The 21-week moving average is on the verge of crossing the 100-week moving average, suggesting that the up-move is likely to extend in the coming weeks. Immediate resistance is at ₹145 . A strong break above it can take the contract up to test the previous high of ₹154 recorded in May 2015. Short-term traders can make use of dips to go long near ₹140. Stop-loss can be placed at ₹133 for the target of ₹153. Inability to break above ₹154 can trigger a corrective fall. If such a corrective fall happens, it could be sharp since the contract has been rising consistently since January. Also, such a fall could remain in place for a prolonged period of time. Traders have to tread with caution in the coming weeks.

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