Comments
Aluminium prices fell sharply last week. The prices have been under pressure over the last month. The Aluminium Futures contract traded on the Multi Commodity Exchange (MCX) fell over 3 per cent last week, breaking below the psychological ₹200 mark.
Last week, in this column, we said that ₹199.50 is a key support, and the contract can bounce back from there. That view has gone wrong. The MCX Aluminium futures contract is currently trading at ₹194.80 per kg.
Outlook
The fall below ₹200 has turned the outlook bearish. Strong resistance is in the broad ₹199-₹201 region. A decisive past ₹201 is needed to turn the outlook bullish again. But that looks difficult, as seen from the price action on the charts. As such, any bounce from here can be capped by the ₹199-₹201 resistance zone.
Support is at ₹192.80. A break below it can drag the contract down to ₹189-₹188.80.
From a medium-term perspective, ₹189-₹188.80 is a crucial support zone. The chances of a bounce from this support zone are very high.
Trade Strategy
The stop-loss on the long positions recommended last week has been hit. Traders can go short now. Accumulate more shorts on a rise at ₹198.50 and ₹200. Keep a stop-loss at ₹202. Trail the stop-loss down to ₹193 as soon as the contract moves down to ₹192. Move the stop-loss further down to ₹191.50 when the contract touches ₹190.50. Exit the short positions at ₹189.50.
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.