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Aluminium price has been struggling to rise over the last couple of months. The Aluminium Futures contract on the Multi Commodity Exchange (MCX) has been oscillating in a sideways range for about two months now. The range of trade has been ₹230-₹250 per kg. Within this range, the contract is currently trading at ₹242 per kg.
Outlook
The near-term outlook is mixed and unclear. Intermediate support is at ₹238. Below that, ₹230 will be the range support. The price action on the weekly chart leaves the bias positive. The long wicks indicates that the MCX Aluminium contract is getting strong buyers around ₹230. That keeps the chances high for the contract to make a bullish breakout above ₹250. Such a break can take the Aluminium contract up to ₹260-₹265 in the coming weeks.
However, as long as the contract stays below ₹250, the sideways range will remain intact. The outlook will turn bearish only if the contract declines below ₹230. If that happens, then a fall to ₹225 can be seen first. A further break below ₹225 will drag the contract down to ₹215 and lower.
But as mentioned above, the price action on the charts is bullish. So, a fall below ₹230 is less likely.
Trade Strategy
Traders can go long on dips at ₹240 and accumulate at ₹236. Keep the stop-loss at ₹228. Trail the stop-loss up to ₹242 as soon as the contract moves up to ₹247. Move the stop-loss further up to ₹252 when the price touches ₹256. Exit the long positions at ₹262.
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