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Aluminium futures (November series) on the Multi Commodity Exchange (MCX) marked a high of ₹209.85 last Monday. But the rally could not lift the contract beyond that, and the price fell. On Tuesday, it closed at ₹205.1.
The contract is trading just above the 200-day moving average (based on the closing price of the continuous contract), which is currently at ₹204.50. As long as aluminium futures stay above this level, the bias will be bullish.
If there is a recovery, aluminium futures could touch ₹212. In our analysis last week, we had mentioned that the contract has the chance to rise to ₹215. But there is a loss of momentum, and the rally is likely to be limited to ₹212.
On the other hand, if aluminium futures slip below ₹204, it will most likely retest ₹200.
Trade strategy
We had suggested long positions at ₹206. The revised stop-loss for this is at ₹204. Since the contract fell after marking a high of ₹209.85, it did not hit our target of ₹215.
Hold this trade but revise the target as there is a loss of traction with the bulls. Bring the exit point down from ₹215 to ₹212. Retain the stop-loss at ₹204.
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