Aluminum futures on the Multi Commodity Exchange (MCX) have been trending sideways since June. That said, the contract has been fluctuating between Rs 196 and Rs 204.
Therefore, until the contract breaks out of either end of the price range, the next leg of the trend will remain uncertain.
The short-term trend could turn bullish if aluminum futures break above Rs 204 and the contract could initially rise to Rs 215. On the other hand, if the price breaks below the support at Rs 196, the contract could be in a downtrend. In this case, the contract may drop to Rs 186 initially. The decline may even extend to Rs 180.
Last week we recommended fresh longs at Rs 198. Keep this trade and set the stop loss at Rs 194.That said, add more longs in case the price falls to Rs 196
When the contract rises above Rs 200, tighten the stop loss to Rs 197. Book profit is Rs 204.