MCX-Aluminium may test key resistance

The aluminium futures contract on the Multi Commodity Exchange (MCX) has been inching higher over the last week. The contract has risen over 2 per cent from its low at around ?142 per kg. It is currently trading at ?145 per kg. The price action suggests that the bias is turning bullish for the contract. The 21-day moving average at ?142 is limiting the downside. Resistance is in the ?147-?148 region which is likely to be tested in the near term. As long as the contract trades above the 21-day moving average support, there is a strong likelihood of it breaking above ?148 in the coming days. Such a break can take the MCX-Aluminium futures contract higher to ?151. A further decisive break above ?151 will boost the momentum. In such a scenario, the contract can then extend the rally to ?158 and ?160. On the other hand, if the contract fails to breach the ?147-?148 resistance region and reverses lower, a pull-back move to ?145 or ?143 is possible. In such a scenario, a range-bound move between ?142 and ?48 can be seen for some time. The contract will come under pressure only if it declines below the 21-day moving average support. Such a break can drag the contract lower to ?139. A further break below ?139 will then increase the likelihood of the contract falling to ?135 or even lower.