Aluminium May Witness Lower Trading At $1785 , Selling Recommended
CommodityOnline | May 02, 2014 07:15AM ET
Aluminum: Seven consecutive sessions have been over that the commodity has been onto a bearish trend. As of Thursday 3 month forward LME Aluminum settled lower at $1785 down by $15 from its previous close. Likewise, at the local market May future contract ended at Rs. 106.35. We have been seen a price falling for the past few session as there has been a broad based sell off in all the metals though the equity markets are trading positive indicating the weakness in the sector is still persisting. Also the inventories have also declined during this week from 5347575 tons to 5343875 tons but the impact is seen least on the metal.
This morning at LME, 3month forward Aluminum is seen trading at $1785 no change from its previous close while there have been no major change in the fundamentals too. At Shanghai the commodity is also trading lower by 0.71% at Yuan 13295/ MT. For today we hold a bearish view while during the US session we have ample economic data in the form of unemployment rate and the payrolls data so any improvement in these numbers would help the commodity to rebound during the US session. From the derivatives though prices have declined but the volumes have been less and the open interest are also low indicating on today’s trading session there may be slight recovery in the prices as part of short covering. For the day initially we suggest selling the underlying while later on we recommend exiting the shorts with minimum profit.
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