Aluminium futures for the August series on the Multi Commodity Exchange (MCX) have been fluctuating within a narrow range of ₹208 to ₹215 over the past two weeks, following a downward trend that commenced in early June when prices were at ₹250.
The current consolidation phase suggests a loss of momentum in the previous downtrend. Notably, there is a robust support band between ₹206 and ₹210, which could potentially indicate a bullish reversal. While this consolidation does not guarantee an outright bullish trend reversal, it does enhance the likelihood of a positive price movement.
Market Outlook
We anticipate that aluminium futures may experience a minor rally, potentially reaching ₹225 from the current market price of ₹212. A breakout above ₹225 could propel the contract to ₹232. Conversely, if the contract falls below the ₹206 support level, it may swiftly decline to ₹190.
Overall, with the bears losing their grip and aluminium futures trading near a significant support level, the probability of a price rally appears favorable.
Trading Strategy
In the previous week, we advised buying aluminium futures at ₹212. Traders should continue holding this position and consider adding more longs if the price decreases to ₹208. It is recommended to maintain a stop-loss at ₹204. Adjust the stop-loss to ₹212 once the price reaches ₹220 and aim to book profits at ₹225.
