Commodity Radar: Religare expert recommends a buy on MCX aluminium futures, eyes 5% upside

Aluminium futures were trading in the red on Tuesday, taking cues from international prices. Base metals remain in uncertain territory amid tariff policy shifts in the US, along with China’s economic issues and overcapacity.

Aluminium’s July contracts on the MCX were trading at Rs 248.75 per kg, falling by Rs 0.60 or 0.24% around 2:30 pm.

Commenting on the action, Ajit Mishra, Senior Vice President, Research at Religare Broking said that aluminium prices are gradually inching higher following significant policy shifts by the United States, which has announced a 30% tariff on Mexican aluminium products set to take effect from August 1, 2025.

Similar trade tensions are brewing in Europe as the European Commission President voiced strong concerns that the proposed 30% tariff on EU exports could disrupt key transatlantic supply chains and negatively impact businesses and consumers on both sides, he added.

Technical view

Aluminium on MCX has shown a strong recovery from its recent swing low of Rs 228.75, rebounding sharply and reclaiming key moving averages, Mishra said.

The price has now sustained above the 50-day and 200-day moving averages, indicating a shift in momentum towards the bullish side. The steadily higher highs and higher lows pattern in the recent candles signals buyer dominance.

Trading strategy

With price currently hovering near Rs 249.35, the uptrend remains intact as long as it holds above the Rs 245–246 zone, Mishra said, adding that a decisive breakout above Rs 251 could pave the way towards Rs 258–260 in the short term.

Traders may consider a buy-on-dips strategy near Rs 248 with a stop-loss at Rs 244, targeting Rs 258, the Religare analyst recommended.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)