Commodity Trading Tips for Aluminium by Kedia Commodity

Ajay Kumar Kedia 24 July 2013

Aluminium yesterday settled flat -0.05% at 107.4 as investors were cautious ahead of flash China manufacturing PMI for July. The euro zone's Consumer Confidence Index improved significantly in July. Any potential towards a further rise in base metals prices should be limited due to a lack of buying. LME aluminum failed to break through the 60-day moving average, but still found strong support at USD 1,840/mt. Finally, LME aluminum ended the day at USD 1,846/mt, up USD 4/mt or 0.22%. Positions decreased 886 lots to 739,380 lots. LME aluminum inventories were down 2,650 mt to 5,466,500 mt. Chinese Premier Li Keqiang again underscored pro-growth policy during his tour to Guangxi. He said efforts should be made to step up investment in railway construction so as to promote social financing. Investment and Financing System Reform in Railway Sector will be forwarded to the State Council before September and will likely be implemented at the end of this year. China Railway Corporation issued RMB 20 billion worth of 10-year railway bonds yesterday, with bid interest rate at 4.15%-5.15%. This boosted base metals prices and China's stock market. It was reported that Premier Li Keqiang said the Chinese government will not tolerate a less than 7% economic growth, alleviating worries over a steep downshift in the Chinese economy. Technically market is under long liquidation as market has witnessed drop in open interest by -10.54% to settled at 3166 while prices down -0.05 rupee, now Aluminium is getting support at 106.90 and below same could see a test of 106.40 level, And resistance is now likely to be seen at 108.20, a move above could see prices testing 108.90.