Comments
Aluminium futures on the Multi Commodity Exchange (MCX), which has been on a decline since February, started to consolidate towards the end of June. Since then, it has been oscillating between ₹196 and ₹204.
We can get some cues on the next leg of trend based on the direction of the break of the above-mentioned range. Currently trading at around ₹198, it is hovering near the bottom of the range.
If the contract bounces off the range bottom, it can retest the range top of ₹204 in the coming days. A rally past ₹204 can turn the trend bullish, where the contract might rise to ₹215.
On the other hand, if the contract slips below support at ₹196, the trend can turn bearish. In such a case, the contract can initially drop to ₹186. The downswing could even extend to ₹180.
Trade strategy
As the aluminium futures is trading near the range bottom, the risk-reward is favourable for long positions. Hence, traders can buy the futures at the current level of ₹198. Add more longs in case the price dips to ₹196. Place a stop-loss at ₹194.
When the contract crosses ₹200, tighten the stop-loss to ₹197. Book profits at ₹204.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.