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The price of futures contract of aluminium on the Multi Commodity Exchange (MCX) has been moving sideways largely between ₹160 and ₹170 since December last year.
However, since the beginning of February, the price has been rising steadily. The March futures contract began its rally from about ₹160 and last week, it broke out of the resistance at ₹170.
Extending the rally, the contract marked a fresh high of ₹176.5 on Thursday, indicating that the upward movement is set to continue. The rally is accompanied by a healthy volume, making the case stronger for the bulls.
Supporting the same, the daily relative has been moving up since for the past three weeks and lies above the midpoint level of 50, the moving average convergence divergence indicator is charting an upward trajectory and remains in the positive territory and the average directional index is showing good bull strength. Also, the price is well above both 21- and 50-day moving averages, signalling strong uptrend. Moreover, the global price trend is inclined to upward i.e., the three-month rolling forward contract of the metal on the London Metal Exchange (LME) broke out of the crucial resistance of $2,070 last week, opening the door for further strengthening.
Traders can be positive and initiate fresh long positions in MCX-Aluminium futures with stop-loss at ₹170.
On the upside, it can rise to ₹182 in the short run. Above that level, it can touch ₹185.
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