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The MCX-aluminium futures contract on the Multi Commodity Exchange (MCX) reversed higher in the past week. The contract made a low of ₹121.8 on Tuesday and bounced back from there. Technically, the support at ₹121.5 has held very well. However, the contract is lacking strength to break above ₹125 decisively over the last couple of trading sessions.
It made a high of ₹126.35 on Friday and has dipped slightly from there. It is currently trading near ₹124.5. Inability to break and decisively close above ₹125 may increase the likelihood of the contract falling to ₹122 and ₹121.5 once again.
A strong break below ₹121.5 can drag the contract lower to ₹119 or ₹118.5.
On the other hand, if the contract breaks above ₹125 in the coming sessions decisively it can rise to ₹128 initially.
Further break above ₹128 will see the upmove extending to ₹130. As being reiterated in this column over the last few weeks, the region around ₹130 is a key long-term resistance. Whether the contract breaks above ₹130 or not will be deciding the next leg of move. A strong break above ₹130 will open doors for a fresh rally to ₹135 and ₹140. But a reversal from ₹130 will see a fall to ₹127 and ₹125.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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