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Prospects Remain Unclear For MCX Aluminium
Jan 31, 2018

The Aluminium futures contract on the Multi Commodity Exchange (MCX)has been stuck in a narrow range between 140 and 144 per kg over the past week. The immediate outlook is unclear.

A breakout on either side of 140 or 144 will decide the next move. Traders can continue to stay out of the market until the range breakout, which can give a clear cue on the next trend.

If the contract continues to trade below 144 and declines breaking the lower end of the range 140, then it can come under pressure. Such a fall can take the contract lower to the crucial support level of 137. A bounce from 137 will ease the downside pressure. In such a scenario, a relief rally to 140 or even higher levels is possible. But if the contract breaks below 137 decisively, it can come renewed selling pressure. Such a break will increase the likelihood of the contract tumbling to 132 or 131 on the back of profit booking.

On the other hand, if the contract manages to break the current range above 144 in the coming days, the downside pressure will ease. In that case, the MCX Aluminium futures contract can target to the key long-term resistance level of 148.