Gurumurthy K The Aluminium futures contract on the MCX fell in the initial part of the previous week and made a low of ₹130.20 per kg on Tuesday last week. Thereafter the contract has been stuck in a narrow range between ₹130 and ₹134. Within this range, the contract is currently trading at ₹131 per kg.
The near-term outlook is unclear. The contract can remain range-bound between ₹130 and ₹134 for some more time. A breakout on either side of ₹130 or ₹134 will then decide the direction of the next move. Traders can stay out of the contract until a clear trade signal emerges.
A break below ₹130 can take the contract initially lower to ₹128 or ₹127. A further break below ₹127 will then increase the likelihood of the fall extending towards ₹123.
On the other hand, if the MCX-Aluminium futures contract breaks above ₹134, it can rise to ₹137 or ₹138. Inability to breach ₹138 can trigger a pull-back move to ₹134 again. But a strong break above ₹138 can take the contract further higher to ₹142 and ₹143.
Global trend
The Aluminum (three-month forward) contract on the LME remained below $1,900 all through last week. The contract was stuck in a narrow range between $1,845 and $1,885 in the past week.
The near-term outlook is mixed. A support is at $1,845 and a resistance is at $1,900. A breakout on either side of $1,845 or $1,900 will decide the direction of the next move.
A break below $1,845 will bring renewed selling pressure and drag the contract to $1,800. On the other hand, a strong break above $1,900 is needed to turn the outlook positive. Such a break will ease the downside pressure and take the contract higher to $1,945.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.