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Aluminium prices have been stable over the past week. Barring the short-lived rise to ₹204.65 per kg earlier last week, the Aluminium Futures contract on the Multi Commodity Exchange (MCX) has been broadly range bound. The trading range has been ₹199-₹203. The contract is currently trading near the lower end of this range at ₹201 per kg.
Outlook
The region between ₹200 and ₹199 is a strong support. A trendline and the 21-Day Moving Average, both are poised in this zone and that makes it a strong support. We expect the Aluminium contract to sustain above this ₹200-199 support zone and rise to ₹205-206 in the short-term. The chances of the upside extending even up to ₹207-207.50 cannot be ruled out.
The Aluminium Futures contract will come under pressure only if it breaks below ₹199. Such a break will turn the outlook bearish and drag the contract down to ₹195 and lower.
Trade Strategy
Traders can go long now. Accumulate on dips at ₹200. Keep the stop-loss at ₹198. Trail the stop-loss up to ₹202 as soon as the contract moves up to ₹203. Move the stop-loss further up to ₹203.50 when the contract touches ₹204.50. Exit the long positions at ₹206.
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