Aluminium futures (May contract) on the Multi Commodity Exchange (MCX) hit a high of ₹244 last week. It then moderated and closed at ₹236.1 on Wednesday.
Note that the chart of the continuous contract of aluminium futures hit resistance at ₹250 last week and then declined. This is strong resistance, and so there is a good chance for the contract to see a corrective decline from the current level.
But for this to happen, the May futures ought to drop below the support at ₹232. If this occurs, the downswing can extend to ₹220, a support. Whether this will be breached depends on the momentum at which the contract falls from the current level. Support below ₹220 is at ₹210.
Trade strategy
Stay out for now. Initiate fresh shorts when aluminium futures drop below ₹232. The target and stop-loss can be ₹220 and ₹236, respectively.