MCX aluminium to see range-bound trading at INR 122-130

The aluminium futures contract traded on India's Multi Commodity Exchange (MCX) lost ground after scaling a high of INR 125.7 on Monday April 10. The increase was basically a bounce back from last week's decline when the contract tested support at INR 124 on Friday, April 8.

MCX aluminium is facing a strong resistance around INR 128 per kilogram and is projected to hover around INR 124 in the near-term. This is 3.1 per cent down from last Tuesday's trading price when MCX aluminium touched a high of INR 128 per kg.

Market analysis suggests the broader range of INR 122-130 that has been defining MCX aluminium since January remains intact. There is a possibility that the contract might decline to INR 122 within this range; a breakout from this range, on either side, will decide the next price trend for the light metal. If MCX aluminium breaks below the lower level, it will touch INR 118 or decline even further, whereas a reversal from INR 122 is likely to take it higher at INR 125-128 range once again, says The Hindu BusinessLine Research Bureau.

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MCX aluminium is expected to find a long-term resistance around INR 130 per kg. The possibility of the contract breaking above the hurdle depends entirely on the next price trend.

On breaking the upper limit of INR 130 per kg, MCX aluminium will rally to INR 135-140. But if it fails to break above a pull-back will take it to INR 128-127 range, and that seems to be the possibility in the foreseeable future, suggests research.