MCX aluminium moves sideways with negative bias on fall in prices

<p>Following a sharp fall in the first week of December, the aluminium futures contract on the Multi Commodity Exchange (MCX) found support at around INR115 per kg and started the move sideways. Last couple of weeks, the contract has been moving sideways in a narrow range.<br /><br />On Friday, the contract fell 1.3 per cent, encountering a key resistance at INR118.5. With this fall, the contract has retained its sideways movement in the band between INR115 and INR118.5. Experiencing selling pressure, the contract continued to decline and fell 0.6 per cent to trade at INR116.3 on Monday.<br /><br />{googleAdsense}<br /><br />A decisive downward breakthrough of the sideways range will reinforce the short-term downtrend and drag the contract down to INR113 in the coming weeks. Further slump below INR113 can pull the contract down to INR110 and then to INR106 in the medium term.<br /><br />On the upside, if the contract breaks above the upper boundary at INR118.5 then it can move up to INR120 and then to INR122.5 in the short term.<br /><br />Traders with a short-term perspective should desist trading in the contract as long as it moves sideways in the range between INR115 and INR118.5. However, traders with a high-risk appetite can initiate fresh short positions if the contract fails to move beyond INR118.5 with a fixed stop-loss and exit at INR115 or at lower levels.</p>