Aluminium prices have been exhibiting volatility over the past week. The Multi Commodity Exchange (MCX) aluminium futures contract has been fluctuating between ₹246 per kg and ₹254 per kg, currently hovering near the higher end of the range at ₹253.
Outlook:
The overall trend is bullish, with the recent pullback viewed as a correction within the broader uptrend. There is a cluster of support levels around ₹248-₹245. As long as the contract remains above ₹245, the uptrend is expected to continue. A potential breakout above ₹254 could propel the MCX Aluminium contract towards ₹260 initially, with further upside potential to reach levels of ₹265-₹267 in the coming weeks. The outlook will only turn bearish if the contract drops below ₹245, potentially leading to a decline towards ₹240. However, based on the price action chart, the likelihood of a break below ₹245 seems low.
Trade Strategy:
Traders can consider long positions on dips around ₹251 and ₹248, setting an initial stop-loss at ₹244. Once the contract moves up to ₹257, trail the stop-loss up to ₹254. As the price reaches ₹261, adjust the stop-loss higher to ₹259. Exit the long positions when the price hits ₹263.
This article was published on February 4, 2025.
