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.
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