Aluminium prices have been volatile within a range for some time now. The Aluminium Futures contract on the Multi Commodity Exchange (MCX) fell to a low of ₹228.30 kg at the beginning of last week. Though it bounced back sharply from there, the contract failed to get a strong follow-through rise and remained stable around ₹235 per kg. It is currently trading at ₹232 per kg.


On the daily chart, the outlook is still negative. The recent price action is a consolidation within the downtrend.  Strong resistance is in the ₹237-₹238 region. So, a decisive break above ₹238 is needed to become bullish again.

As long as the contract trades below ₹238, the bias is still negative. As such we can expect the MCX Aluminum contract to make a decisive break below 228 and fall to ₹225 first. A further break below 225 will be very bearish. It can then drag the contract down to ₹220-₹219 and even ₹217 on the downside.

To avoid this fall, the contract has to breach ₹238 and sustain above it. Only in that case, a rise to ₹240-₹245 will come back into the picture.

Trade Strategy

A week ago we suggested to go short below ₹232. Hold on to the shorts. But revise the stop-loss slightly higher to ₹239. Revise the stop-loss down to ₹230 when the price falls to ₹227. Move the stop-loss further down to ₹226 when the contract touches ₹224. Exit the shorts at ₹220.