LME Aluminum Is Seen Trading At $1740, Up By A Mere $5
CommodityOnline | Mar 28, 2014 06:57AM ET
Aluminum: We had suggested a sell view on aluminum in Thursday’s trading session while prices were seen trading down until early in the US session. Later on, aluminum recovered slightly and its 3 month forward prices at the LME ended at $1738, up $9 from the previous close. We believe that the gains may have been a clean short covering on the recent bearish trend. We could suggest such an opinion as the trading volume of aluminum at the LME was very thin and remained much below the 15-days moving average. Likewise, the MCX March expiry ended the day at Rs 102.05 while it made its intraday low of Rs 101.40. Also, there are two working days are left for this metal’s March contract’s expiry and hence, volumes may rise due to short covering while the open interest may decline.
This morning at the LME, aluminum is seen trading at $1740, up by a mere $5 from its previous close. We believe the gains visible this morning could be supported by the rising equity stocks in Asia.
However, we have not seen any change in fundamentals, while it’s likely that China may soon recover by providing any stimulus to the economy. In this regard, some sort of recovery or physical buying
interest may be noticed. At the MCX platform, the contract is expiring on 31st of March therefore, prices may see a good amount of short covering with higher volumes and falling open interests. For the day, we do not intend to take a direct call while short covering may be noticed.
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