MCX Aluminium hovers above major support

<p>The aluminium futures contract on the Multi Commodity Exchange (MCX) fell over 3 per cent to close at INR116.85 per kg in the past week.<br /><br />However, the contract has begun this week on a slightly positive note and is currently trading at INR117.5.<br /><br />A key support is at INR116.2. If the contract breaks below this support decisively it can extend the fall to INR114 this week. The level of INR114 is a strong support and a possibility of a reversal from there cannot be ruled out. Such a reversal can take the contract higher to INR116 or INR117.5 thereafter.<br /><br />On the other hand, if the aluminium futures contract manages to sustain above the support at INR116.2 in this week it can bounce to INR119.25 initially.<br /><br />{googleAdsense}<br /><br />A further break above INR119.25 will see the upmove extending to INR122.5. In such a scenario, a range-bound move between INR116 and INR122.5 can be seen for some time.<br /><br />A break out on either side of this range will then decide the next leg of move for the contract.<br /><br />Short-term traders with a high risk appetite can go long if the contract reverses higher from INR116.2. A stop-loss can be placed at INR115 for the target of INR118.5. Revise the stop-loss higher to INR117 as soon as the contract moves up to INR117.5.</p>