Aluminium futures on the Multi Commodity Exchange (MCX) has been charting a sideways trend since June. That is, the contract has been fluctuating between ₹196 and ₹204.
So, until the contract breaches either end of the price band, the next leg of trend will remain uncertain.
If aluminium futures breaks out of ₹204, the short-term trend can turn bullish, and the contract can initially rally to ₹215. On the other hand, if the price slips below the support at ₹196, the contract will likely witness a downtrend. In such a case, the contract could initially drop to ₹186. The downswing could even extend to ₹180.
Trade strategy
We recommended fresh longs at ₹198 last week. Retain this trade with stop-loss at ₹194. That said, add more longs in case the price dips to ₹196
When the contract rallies above ₹200, tighten the stop-loss to ₹197. Book profits at ₹204.