Market and product
Aluminum’s Gain Seen Halted at About $2,000
Aluminum may rise for a third weeknext week in London, though gains are likely to be capped atabout $2,000 a metric ton, according to technical analysis byBarclays Plc.
The attached chart shows prices yesterday climbed above$1,928 a ton, the top of the range that starts with the April 16session. The 50 percent retracement of the drop from Feb. 15 toApril 15, a level singled out in so-called Fibonacci analysis,and the 200-day moving average lie ahead, forming resistance,said Lynnden Branigan, a technical analyst at Barclays.
“Given the corrective upticks in the base complex,aluminum could be dragged higher over the next week,” Branigansaid in an e-mail yesterday. “The break above $1,928 isexpected to be capped in the $2,000 area.”
The lightweight metal, used in products from soda cans toaircraft, touched the lowest price since October 2009 on April15 at $1,818 a ton. Aluminum for delivery in three months tradedat $1,931.75 at 6:55 a.m. today on the London Metal Exchange,down 6.8 percent this year.
In technical analysis, investors and analysts study chartsof trading patterns and prices to forecast changes in asecurity, commodity, currency or index. Fibonacci analysis isbased on the theory that prices rise or fall by certainpercentages after reaching a new high or low.
