Aluminium price continues to remain stable and range bound over the last two weeks. The Aluminium futures contract on the Multi Commodity Exchange (MCX) has been trading in a range of ₹241-₹247 for more than two weeks now. Within this range, the contract is currently trading at ₹243 per kg.

Outlook

The sideways range is intact. That leaves the near-term outlook mixed and unclear. However, from a big picture, the bias is positive. Strong support is around ₹240. A strong trendline is poised around this level. That will make it difficult for the Aluminium contract to decline below ₹240.

That broadly keeps the outlook is bullish from a medium-term perspective. So, we can expect the contract to sustain above ₹240 going forward and make a bullish breakout above ₹247 eventually. Such a break can take the MCX Aluminium futures contract up to ₹250-₹251 initially. An eventual break above ₹251 will then see an extended rise to ₹256-₹257 in the coming weeks.

This bullish view can go wrong only if the MCX Aluminium contract declines below ₹240. If that happens, we can see a fall to ₹234 first and then may be even lower. But that looks less likely as a strong negative trigger might be needed to break below the support at ₹240.

Trading strategy

Last week we suggested to go long at ₹243. Hold on to this trade. Accumulate on dips at ₹241. Retain the stop-loss at ₹238. Trail the stop-loss up to ₹245 as soon as the contract moves up to ₹247. Move the stop-loss further up to ₹248 when the price touches ₹250.  Exit the long positions at ₹253.