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The December futures contract of Aluminium on Multi Commodity Exchange (MCX), which was consolidating between ₹142 and ₹148, broke out of the range in early November.
It has been rallying since then and is currently hovering around ₹162 after registering a high of ₹164.4 on Monday.
Strong momentum
The contract looks steady and the price is likely to rise further. Indicating a strong upward momentum, the daily relative strength index is facing upside and lies above the midpoint level of 50.
The moving average convergence divergence indicator on the daily chart as well has been moving up consistently and it stays in the positive territory. Also, the price lies well above the 21-day moving average.
The above indications show that the price can rally past the prior high of ₹164.4 and move appreciate towards ₹166.
A breakout of this level can lift the contract to ₹170. In case if the price moderates, the contract can find support at ₹160.
This level is a strong base and since the contract is bullish, traders can buy with a stop-loss at ₹160.
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