Aluminium prices witnessed some wild swings last week. The Aluminium Futures contract on the Multi Commodity Exchange (MCX) initially surged to a high of ₹252.10 per kg. But from there, it fell sharply, giving back all the gains to make a low of ₹236.85. The contract has bounced slightly from there, and it is currently trading at ₹243.50 per kg.
Outlook
Support is around ₹240. As long as the contract stays above this support, the near-term outlook can be positive. A rise to ₹250-252 can be seen again.
Broadly, ₹240-₹252 can be an expected trading range for some time. On the charts, flat moving averages also favour a range- bound movement for some time. So, a breakout on either side ₹240-₹252 will be needed to determine the next leg of the move.
A break below ₹240 can take it down to ₹237 – the next support. A further break below ₹237 can drag the MCX Aluminium Futures contract further down to ₹230-₹229 in the short term.
On the other hand, a decisive break above ₹252 will be bullish. It can then take the contract up to ₹256-257.
Trade Strategy
Traders can stay out of the market at the moment. Although the contract is holding well above ₹240, we may have to wait and watch if a strong follow-through rise occur in the next few days.
As such wait for the MCX Aluminium contract to breakout on either side of ₹240-₹252 and then take trades accordingly.