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Aluminium futures (August series) on the Multi Commodity Exchange (MCX) has been on a recovery over the past week. It closed above the resistance at ₹215 last week, turning the short-term outlook positive.
From the current level of ₹220, the nearest hurdle can be spotted at ₹225. A breakout of this can lift aluminium futures to ₹232. Post a rally to ₹232, the contract might see a decline.
- Also read: Aluminium futures near a key support
On the other hand, from the current level, if the price drops below the resistance-turned-support of ₹215, it can find support at ₹210. Note that the price band of the ₹206-210 is a support band. A breach of ₹206 can result in aluminium futures establishing a fresh leg of downswing.
However, as it stands, the likelihood of the price going up is high and so, traders can remain on the long side.
Trade strategy
We recommended buying aluminium futures at ₹212 a couple of weeks back. Retain this trade. But revise the stop-loss from ₹204 to the entry price of ₹212 so that the risk is neutralized. Book profits at ₹225.
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