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Aluminium futures on the Multi Commodity Exchange (MCX) has been on the rise since the final week of February. Back then, it bounced off the support at ₹198.
For the past few sessions, the contract has been moving around ₹203; it closed at ₹203.2 on Monday. The 50-day moving average now lies at around ₹204, which is resisting the bulls.
In case aluminium futures take a U-turn, it can fall back to the support at ₹198. If this level is breached, the contract can establish another leg of downtrend, where the price could decline to ₹192, a good base.
On the other hand, if aluminium futures cross over the ₹204-205 barrier, it can see a quick rally to ₹212. A breakout of ₹212 can turn the medium-trend bullish. As it stands, from the current level of ₹203, the probability of a rally and a fall are similar.
Trade strategy
A couple of weeks back, we recommended going long on aluminium March futures at ₹198. Liquidate this position at the current level.
Consider fresh longs again if the contract breaches ₹205. Target and stop-loss can be at ₹212 and ₹202.
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