Aluminium futures has been in an uptrend since August last year. The contract hit a high of ₹262.20, the highest since April 25, 2022.
But since marking the high, the contract moderated and is now consolidating in a narrow range of ₹256-258.50.
Nevertheless, the broader bull trend remains intact and aluminium futures can resume the uptrend anytime. That said, there might be a price correction to ₹254 before the next rally begins.
If aluminium futures start moving up as expected, it can rally to ₹270 in the short-term. A breakout of ₹270 can lift it to ₹275.
On the other hand, if the contract slips below ₹254, there is an immediate support at ₹250. Subsequent one is at ₹246.
Trade strategy
We suggested buying aluminium futures (February) at ₹256 last week. Traders who initiated this trade can retain this with the stop-loss at ₹250. When the contract rises to ₹265, revise the stop-loss to ₹260. Book profits at ₹270.