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The Aluminium futures contract on the Multi Commodity Exchange extended its rally for the second consecutive week. The contract surged about 4 per cent intra-week and made a high of ₹136.8 per kg on Wednesday last week. It has come off slightly from the high and is currently trading at ₹135 per kg.
The near-term outlook remains positive. Support is in the ₹132-131 region which is likely to limit the downside in the near term. An upmove to test the next resistance at ₹138 is likely in the near term. Inability to breach ₹138 can pull the contract lower to ₹133 or ₹132 again. In such a scenario, a range-bound move between ₹131 and ₹138 can be seen for a while.
On the other hand, if the MCX-Aluminium futures contract manages to break decisively above ₹138, it can gain fresh momentum. Such a break can take the contract higher to ₹141. A further break above ₹141 will then increase the likelihood of the contract extending its upmove towards ₹145.
Traders can go long on dips at ₹133 and ₹132. Stop-loss can be placed at ₹129 for the target of ₹140. Revise the stop-loss higher to ₹135 as soon as the contract moves up to ₹138.
Global trend
The Aluminum (three-month forward) contract on the LME has risen over 2 per cent last week. The contract has been oscillating around $1,900 per tonne over the last few days. It is currently poised at $1,920. Supports are at $1,900 and $1,885. The outlook will remain positive as long as the contract sustains above this support zone.
Immediate resistance is at $1,930. A strong break above it can take the LME-Aluminum higher to $1,960 and $1,970 in the coming days.
The contract will come under pressure only if it declines below $1,885. The next target is $1,845.
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