Comments
The continuous futures of aluminium on the MCX (Multi Commodity Exchange), which has been on the downtrend since early March, started consolidating between ₹205-215 in July and August. Last week, the contract fell below the key support at ₹205 and is now hovering around ₹200.
Going forward, the contract is likely to witness declining trend after consolidation. Note that the aluminium futures is tracing a downward channel and a consolidation means it could touch the upper end at around ₹205, which is already a resistance. The 20-day moving average coincides at this level, making the resistance stronger.
The possible outlook could be that the future might stay sideways for a while before declining. While the nearest support is at ₹186, the contract is expected to drop below this level during the next down move and touch ₹170 over the medium-term.
We recommend sell in aluminium futures at the current level of ₹205. Add more shorts if the contract sees a rally to ₹210. Initial stop-loss can be at ₹220 and tighten this to ₹200 when the contract slips below ₹186. Exit all the shorts at ₹170.
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.