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The continuous contract of aluminium on the Multi Commodity Exchange (MCX), which was flat for the past couple of weeks, rallied on Wednesday and closed above the important level of ₹228.
Thus, the bulls seem to be gaining traction and prices are likely to goup.
Supporting the positive outlook, the relative strength index (RSI) and the moving average convergence divergence (MACD) on the daily chart are showing good bullish momentum.
Also, the contract has been forming higher lows and higher highs over the past two months.
Notably, we had advised long positions in aluminium futures during the final week of December at ₹225 and ₹220. Recommended stop-loss was at ₹214.
Traders, who already hold longs, can continue to hold but tighten the stop-loss to ₹220.
On the other hand, one can also consider fresh positions at current level with same stop-loss i.e., ₹220.
For both existing and new longs, when the contract rallies past ₹238, revise the stop-loss to ₹228.
Liquidate the longs at ₹250 as there can be a price correction off this level.
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