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Aluminium futures (November series) on the Multi Commodity Exchange (MCX) opened the week on the front foot – it gained 1 per cent on Monday to close the session at ₹209.2. Although its price moderated in the first half of Tuesday, the uptrend remains intact.
We expect the contract to resume the uptrend and head towards ₹215. Note that there is resistance at ₹212. But given the momentum, the contract is likely to surpass this hurdle in the upcoming sessions.
On the other hand, if the contract falls, there is support at ₹207. Subsequent support is at ₹205. The chances of aluminium futures declining below ₹205 is less. Notably, both the 20- and 50-day moving averages lie at around ₹205, making it a potential floor with respect to price.
Trade strategy
Hold the longs that we recommended to initiate at ₹206. But alter the stop-loss from the earlier suggested level of ₹200 to ₹204.
Further, when the contract rallies to ₹212, tighten the stop-loss to ₹208. Book profits at ₹215.
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