The Aluminium futures contract on the Multi Commodity Exchange (MCX) surged 5 per cent on Friday and closed on a strong note for the week. It is currently trading at ₹211 per kg.
On the daily chart, the rally on Friday indicates a bullish breakout above the key resistance level of ₹208.7. This leaves the short-term bias bullish.
However, key resistances are ahead at ₹212.8 — the 100-Week Moving Average and then at ₹216-₹217. The bullish case will strengthen only if the contract breaks decisively above ₹217.
The break above ₹217 is possible if the MCX Aluminium Futures contract manages to sustain above ₹208.7. Such a break can take the contract up to ₹220-₹221 in the short term.
The contract will come under pressure again if it declines below ₹208.7. In that case, the contract can fall to ₹205-₹204.5 initially. A further break below ₹204.5 will increase the chances of revisiting ₹200 levels on the downside.
We expect the MCX Aluminium contract to sustain above the immediate support at ₹208.7 and rise to ₹216-₹217 initially and then to ₹220-₹221 eventually.
Trading strategy
Traders with a short-term perspective can go long at current levels. Accumulate on dips at ₹209. Keep the stop-loss at ₹206. Trail the stop-loss up to ₹213 as soon as the contract moves up to ₹216. Move the stop-loss further up to ₹215 when the contract touches ₹217 on the upside. Book profits at ₹218.
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.