Aluminium futures on the Multi Commodity Exchange (MCX) has been rallying since June last year. Although it was in a consolidation phase between December and February, it eventually broke out of the range and established another leg of uptrend.
Consequently, it marked a fresh high of ₹180.15 before a couple of weeks before moderating a bit.
The price action since the beginning of the current month has not really been substantially bullish. Nevertheless, the trend is directionally up, and the contract has been forming higher lows, hinting an inherent bullish bias.
Corroborating the positive bias, the price lies above the 21-day moving average and indicators like the relative strength index and the moving average convergence divergence on the daily chart remains in their respective bullish territory. Moreover, the average directional index, though it does not indicate a strong uptrend, shows that the bulls hold an advantage over the bears.
Traders can take positive view on aluminium futures. But since ₹180 has been acting as a hindrance, one can wait for now and initiate fresh long positions if the contract decisively breaks out of ₹180. Stop-loss can be maintained at ₹176. A breakout of ₹180 can take the contract to ₹187 in the near-term. Above this level, it can face resistance at ₹190.