Aluminium price has been volatile in the past week. The aluminium futures contract on the Multi Commodity Exchange (MCX) has been oscillating between ₹246 per kg and ₹254 per kg. Within this, it is currently trading near the upper end of the range at ₹253.
Outlook
The trend is up. The recent fall is just a correction within the broad uptrend. Cluster of support are there in the ₹248-₹245 region. As long as the contract trades above ₹245, the uptrend will remain intact.
As such, the chances are high to see a break above ₹254 in the coming days. Such a break can take the MCX Aluminium contract up to ₹260 initially. A further break above ₹260 can then take the contract up to ₹265-₹267 eventually in the coming weeks.
The outlook will turn negative only if the contract declines below ₹245. If that happens, we can see a fall to ₹240. But the price action on the chart indicates that the chances of a fall below ₹245 is less likely.
Trade Strategy
Traders can go long on dips at ₹251 and ₹248. Keep the stop-loss at ₹244 initially. Trail the stop-loss up to ₹254 as soon as the contract goes up to ₹257. Move the stop-loss further up to ₹259 when the price touches ₹261. Exit the long positions at ₹263.
