30 DECEMBER 2015Business Recorder
LME aluminium to retest support at $1,420 in three months
Edited by : AL CIRCLE
2 min read
LME aluminium is expected to retest a support at $1,420 per tonne over the next three months, a break below which could cause a loss to the next support at $1,255.
These supports are identified respectively as the 61.8 percent and the 76.4 percent Fibonacci projection levels of a downward wave (c), the third wave of a bigger wave C from the May 2011 high of $2,803. Except the 23.6 percent level at $1,852, all other projection levels work well either as resistances or supports, such as the 14.6 percent level at $1,954 and the 50 percent level at $1,554.
That means over the next three months, aluminium's moves could still be controlled by the relevant projection levels. The wave (c) could be strong enough to extend to $988, its 100 percent projection level, which looks too far away to be a realistic target. A more proper target could be $1,255.
A Fibonacci projection analysis on the bigger wave C reveals that it has briefly extended below a support at $1,505, the 61.8 percent level. Chances are it may travel further to the 76.4 percent level at $1,198, which is slightly below $1,255.
Both $1,255 and $1,198 levels could be confirmed as targets when aluminium breaks the support at $1,420. A break above $1,554 could lead to a gain to the 38.2 percent level at $1,687.
These supports are identified respectively as the 61.8 percent and the 76.4 percent Fibonacci projection levels of a downward wave (c), the third wave of a bigger wave C from the May 2011 high of $2,803. Except the 23.6 percent level at $1,852, all other projection levels work well either as resistances or supports, such as the 14.6 percent level at $1,954 and the 50 percent level at $1,554.
That means over the next three months, aluminium's moves could still be controlled by the relevant projection levels. The wave (c) could be strong enough to extend to $988, its 100 percent projection level, which looks too far away to be a realistic target. A more proper target could be $1,255.
A Fibonacci projection analysis on the bigger wave C reveals that it has briefly extended below a support at $1,505, the 61.8 percent level. Chances are it may travel further to the 76.4 percent level at $1,198, which is slightly below $1,255.
Both $1,255 and $1,198 levels could be confirmed as targets when aluminium breaks the support at $1,420. A break above $1,554 could lead to a gain to the 38.2 percent level at $1,687.
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