MCX-Aluminium stuck within a narrow range

The Aluminium futures contract on the Multi Commodity Exchange fell below a key support level of INR 121.5 a kg in the past week.

However, the contract has not witnessed any strong follow-through selling after this break and has been stuck in a narrow range between INR 120 and INR 121 since then.

It is currently trading at INR 120.5 per kg.

The 200-day moving average support is at INR 119.5, which is likely to be tested as long as the contract trades below INR 121.5.

If the contract manages to sustain above the 200-day moving average support, a range bound move between INR 119.5 and INR 121.5 is possible for some time.

A breakout on either side of INR 119.5 or INR 121.5 will then determine the next move.

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A decisive break below INR 119.5 can increase the selling pressure. Such a break can drag it to INR 117 or even INR 115 going forward.

On the other hand, the downside pressure will ease if the contract manages to decisively advance above INR 121.5 from either current levels or reversing higher after testing the 200-day moving average support level of INR 119.5.