The direction of the major trend of the aluminium futures, established almost an year ago, is up though there has been an increase in volatility in the past month. That is, the April futures contract of aluminium on the Multi Commodity Exchange (MCX) has been witnessing frequent price swings on both sides since the beginning of March.
However, the support at ₹170 stays strong and prevented the bears from turning the tide in their favour. So, the overall trend being bullish and that the support at ₹170 is holding strong, the likelihood of a rally from here is more.
Supporting the positive bias, the relative strength index and the moving average convergence divergence indicators on the daily chart remain in their respective positive territory and the contract price is above the 21-day moving average (DMA).
At the same time, the bulls are showing some hesitation in breaching the resistance at ₹178. Traders can stay on the fence for now and initiate fresh long positions with a stop-loss at ₹174 if the contract breaks out of ₹178. On the upside, it is likely to rally to ₹182, a breach of which can lift the contract to ₹185.