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Aluminium prices have been volatile over the last one week. The Aluminium Futures contract traded on the Multi Commodity Exchange (MCX) has come down sharply after surging to a high of ₹248.70 per kg last week. It is currently trading at ₹236 per kg.
Outloook
The overall trend is up. So, the recent fall is a correction within the broad uptrend. There is not much room left of the downside. Strong support is in the ₹234-₹233 region which can halt the corrective fall.
We expect the Aluminium contract to reverse higher from the ₹234-₹233 support zone. That will indicate the resumption of the overall uptrend. It will take the MCX Aluminium contract up to ₹240-₹243 initially. An eventual break above ₹243 will then clear the way for arise to ₹250 in the coming weeks.
The contract will come under pressure only if it declines below ₹233. If that happens, we can see a fall to ₹230.
Trade Strategy
Traders can go long now at ₹236 and accumulate on dips at ₹234. Keep the stop-loss at ₹231. Trail the stop-loss up to ₹238 as soon as the contract goes up to ₹240. Move the stop-loss further up to ₹239 when the price touches ₹241. Exit the long positions at ₹243.
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