Aluminium futures on the Multi Commodity Exchange (MCX) has been in a bull trend since February. However, towards the end of April, the rally lost traction.
While there has not been a bearish reversal, aluminium futures has been largely moving sideways. The June aluminium futures is stuck between ₹232 and ₹250.
So, technically, the path of the next leg of trend depends on the direction of the break of the ₹232-250 range.
A breakout of ₹250 can trigger another leg of rally, which can possibly take aluminium futures to ₹270 or ₹280. But if the support at ₹232 is breached, the short-term trend can turn bearish where the price can drop to ₹210 and then to ₹200.
Nevertheless, at the moment, there is no clarity about the next swing in price.
Trade strategy
Stay out for now. Initiate fresh trade along the direction of the break of the ₹232-250 range.
That said, traders with high risk-appetite can go long on aluminium futures when the price softens to ₹235. Target and stop-loss can be ₹250 and ₹228 respectively.