Aluminium prices have experienced a downward trend over the past two weeks after touching a high of ₹359.70 per kg on August 11 on the Multi Commodity Exchange (MCX). The futures contract is currently trading at approximately ₹345 per kg.
Because the August futures contract is approaching expiration, market analysis has shifted focus to the September futures contract. Price action on the weekly chart indicates that the contract is receiving notable support around the ₹344 level, with an important technical support identified near ₹343.
According to market observations, if the contract maintains its position above the ₹343 support level and initiates a rebound, it could move higher toward the ₹358 to ₹360 range in the short term. Conversely, a breakdown below the ₹343 threshold could lead to a further decline toward ₹335, invalidating the near-term bullish outlook.
For market participants monitoring the commodity, the current price action leaves the technical bias positive for a potential bounce from the ₹343 region. Trading strategies outlined for high-risk appetite participants suggest considering long positions at the current ₹345 level, accompanied by a stop-loss at ₹338.
Additional risk management guidelines include trailing the stop-loss upward to ₹348 if the contract reaches ₹351, and moving it further to ₹350 and ₹352 as prices touch ₹353 and ₹354 respectively. Recommended exit targets for these long positions are set at ₹356.
"Commodity price fluctuations require disciplined risk management, especially when trading near crucial technical support levels. As seen in the recent MCX aluminium futures movement, identifying key price thresholds like the ₹343 support helps market participants define their risk parameters clearly. For businesses and traders operating in commodities, maintaining predefined stop-loss strategies is essential to navigate short-term volatility effectively." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
