MCX-aluminium futures bounce from a key support

<p>The MCX-aluminium futures contract on the Multi Commodity Exchange (MCX) fell last week, breaking below the support at INR 124 a kg. However, the 21-week moving average at around INR 122 aided in halting the fall.</p> <p>The contract made a low of INR 122.25 on Thursday and has reversed sharply higher from there on Monday. It is currently trading at around INR 124.</p> <p><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/MCXAluminum.jpg" alt="News" width="517" height="339" /></p> <p>Immediate resistance is at INR 125. If the contract manages to surpass this hurdle, the downside pressure will ease. Such a break can take the futures contract higher to INR 128 initially. A further break above INR 128 will pave the way for a test of the crucial long-term resistance at INR 130.</p> <p>On the other hand, if the contract fails to break above INR 125, it can remain range-bound between INR 122 and INR 125 for some time. A break below INR 122 can pull the contract lower to INR 121.5.</p> <p>{googleAdsense}</p> <p>This level of INR 121.5 is a crucial support to watch. If the contract manages to reverse higher from this support, the downside pressure may ease once again. In such a scenario, the contract can rise to INR 125 and INR 126 again.</p> <p>But the contract may come under pressure if it breaks below this support decisively. Such a break may trigger a fresh fall to INR 119 or INR 118.5 going forward.</p>