Aluminium Weekly Technical Outlook 18 to 22th AugBack

Aluminum august contract inched 2.85 rupees down to settle at 121.05 for the week. As we can see in chart provided above, metal has witnessed a nice reversal from significant resistance of 124 and settled with a bearish engulfing pattern on weekly chart. 10 weeks SMA is above 20 weeks SMA and 20 weeks SMA is also above 50 weeks SMA keeps uptrend intact but prices have moved too far from MAs so here we can see some alignment among price and MAs. MACD has been staying above zero and signal line and hints a strong bullish momentum. Stochastic is in overbought territory and may bring more declines to offload overbought reading. Resistance is now seen near 125.45 any sustained move along with stability above the same would bring more charm and then we will see an extended up move that would bring 130 and more upside. Areas of 130 are very crucial to watch and 2 or more closing above that level would offer a retest to 137-143 zones. Support is now seen near 120 zones and any failure of these levels would confirm a retest to 118 zones. areas of 118-116 are expected to remain good reversal zones but if metal fails to hold these levels then 114-113 can’t be completely ruled out.

Aluminium trading range for the week is expected among the key support at 120.5 and resistance at 125.6.

Recommendation:

· This week selling aluminum on jumps around 123-124 with stop loss above 125.50 for targeting 118-114 and more down side might be appropriate in short term.

· In alternative scenario selling below 120.50 with stop loss above 121.10 for targeting 119.50-118 and more down side might be appropriate.

· Buying can be taken above 125.60 with stop loss below 125 for targeting 127-130 and more upside might be appropriate.