Commodity Calls

Go short on MCX Aluminium

Gurumurthy K | | Updated on: Jun 13, 2022
istock

istock

The sharp and consecutive fall over the last three weeks strengthens the down move

The Aluminium futures contract traded on Multi Commodity Exchange has been on a strong downtrend since March this year with intermediate corrections. The contract made a high of ₹325.4 per kg in March this year and has tumbled over 31 per cent from there. It is currently trading at ₹224 per kg.

The sharp and consecutive fall over the last three weeks strengthens the down move. It also indicates the beginning of a fresh leg of down move within the overall downtrend. Immediate support is at ₹223.

The chances are high for the contract to break this support and extend the fall. Such a break can drag it to ₹200 in the coming weeks. Resistance is in the ₹232-233 region. In case the contract manages to hold above ₹223 for now and bounces back, the upside can be capped at ₹233.

A break above ₹233 looks less likely. Traders can go short now and accumulate at ₹229 in case a bounce is seen. Stop-loss can be placed at ₹236. Trail the stop-loss down to ₹219 as soon as the contract falls to ₹213. Move the stop-loss further down to ₹210 as soon as the contract touches ₹207 on the downside. Book profits at ₹203.

From a medium-term perspective, the region around ₹200 is a good support zone. As such the current fall is likely to halt around ₹200 and a bounce-back move is possible. So, traders going short should look to exit at the level mentioned above. 

Published on June 13, 2022
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