The aluminium futures (continuous contract) on the MCX, after hitting a high of ₹325.4 in March has been moving southwards. It made a low of ₹202.25 recently, thereby, losing about 39 per cent from the top i.e., ₹325.4.

However, the price action over the past few weeks suggests that the downtrend has halted, at least temporarily, and the contract is now largely oscillating in the range of ₹200-215. While this may not be an indication of a bullish trend reversal, the consolidation improves the chances for a corrective rally from here even as the overall trend is bearish.

That said, technically, the aluminium futures should move out of the ₹200-215 range for the next leg of the trend.

If the contract falls below ₹200, it can decline to ₹187 and possibly to ₹160, the nearest supports below ₹200. On the other hand, if it breaks out of ₹215, it can appreciate to ₹235, the immediate barrier. A breach of this can lift the contract to the ₹250-254 range — a resistance band. But a rally beyond this price band is unlikely.

Traders can stay on the fence, and consider fresh shorts if the support at ₹200 is breached. Or short if aluminium futures rallies to ₹235 and ₹250 i.e., split the entries into two legs and initiate one leg of short at ₹235 and another at ₹250 so that the average short price would be around ₹243.

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