Aluminium Futures Maintain Bearish Outlook Amid Sideways Trading

Aluminium futures are currently trading at ₹330 per kg, maintaining a sideways trend for approximately two weeks. Although prices saw an increase before entering this consolidation phase, the broader market trend remains bearish, pointing to a high likelihood of a fresh decline.

The November futures contract has oscillated between ₹324 and ₹333 over the past couple of weeks. However, the prevailing trend has been downward since mid-September. Market observers note that the recent price rise and subsequent sideways movement are likely part of a corrective phase rather than a trend reversal.

The contract is expected to resume its downtrend from the current level of ₹330. It may slip below the immediate support level of ₹324, potentially extending the fall to ₹305 in the near term. The price band between ₹300 and ₹305 serves as a crucial support region. If the base at ₹300 is breached, the decline could extend further to ₹295.

Conversely, if aluminium futures break out above the resistance level of ₹333, the market outlook could turn positive. In that scenario, the contract could rally to ₹350. Crossing this hurdle might allow prices to rise further toward ₹358. Nevertheless, the immediate outlook remains bearish as long as the barrier at ₹333 stays valid.

Trading strategies for the November futures contract currently suggest maintaining a short position initiated at ₹332, with a recommended stop-loss set at ₹340. Traders are advised to tighten the stop-loss to ₹328 once prices slip to ₹320, with profit-booking targeted at ₹305.

"Commodity price fluctuations, such as the current bearish trend in aluminium futures, have a direct impact on manufacturing input costs and operational margins for businesses in the supply chain. Entrepreneurs and business leaders operating in sectors dependent on raw metals need to closely monitor these market movements and manage their inventory costs prudently. Incorporating proactive risk management strategies helps businesses navigate commodity price volatility without adversely affecting their bottom line." — Dr. Shishir Gupta, Founder & CEO, StartupLanes