Aluminium futures on the Multi Commodity Exchange (MCX), which has been on a decline for about three weeks, broke below the support at ₹225. The contract also made a lower low on the daily chart.
Following the breach of the support at ₹225, the outlook has turned weak. The nearest support can be spotted at ₹215. Immediately below this level is another support at ₹210. Therefore, the price region between ₹210 and ₹215 can offer support to aluminium futures.
But in case the contract recovers from here, it can face barriers at ₹230 and ₹235. So, for the trend to turn positive, aluminium futures ought to surpass the resistance at ₹235. In such a case, the price can rise to ₹250.
Nevertheless, as it stands, the probability of a decline from the current market price is high. So, traders can consider going short on aluminium futures.
Trade strategy
Sell aluminium futures now at ₹224. Add shorts if the contract inches up to ₹230. Place stop-loss at ₹235. Revise the stop-loss lower to ₹220 when the price falls to ₹215. Book profits at ₹210.
- Also read: Crude oil down as Chinese GDP disappoints
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.