Immediate outlook is not clear for MCX-Aluminium

The Aluminium futures contract on the Multi Commodity Exchange is trading volatile. The contract declined in the past week as expected. Though the contract moved up in the initial part of the weekto a high of ₹123.65 a kg on Wednesday but it failed to sustain higher and had reversed lower to make a low of ₹120.95 on Friday. However, the contract has reversed higher once again on Monday and is currently trading at ₹122.6 . Immediate outlook is not clear for the contract. Traders can continue to stay out of the market until a clear trade signal emerges.

A range bound move between ₹121 and ₹126 is possible for some time. A breakout on either side of this range will decide the next move. Within the range intermediate resistance is at ₹123.5. A strong break above it will increase the likelihood of the contract moving up to ₹126. On the other hand, inability to break above ₹123.5 and a subsequent downward reversal can keep the contract in a narrow range between ₹121 and ₹123.5 in the near term. As long as the contract remains below ₹123.5, the possibility will remain high for it to decline below ₹121. Such a break below ₹121 can drag the contract lower to ₹120 initially. Further fall below ₹120 will see the downmove extending to ₹119 and ₹118.5.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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