Expect Aluminium to fall towards Rs 106: Sharekhan

Sharekhan's report on base metal

Aluminium reaching key hurdles: The chart shows the price movement of MCX Aluminium. MCX Aluminium has been trading in a medium-term downward sloping channel. Recently, it had fallen from the upper channel line towards the lower line and bounced thereon. The daily momentum indicator that was showing a positive divergence entered a bullish mode. As a result, the base metal has moved up significantly. It has crossed its key daily moving averages and 61.8 percent of the previous fall. It has reached near the 78.6 percent retracement mark (112.20) from where the base metal is expected to cool off. The daily momentum indicator has been stretched to an overbought territory. Thus, unless the base metal crosses 112.20 on a closing basis, it is expected to fall towards 106. However, if the level of 112.20 is crossed, aluminium can stretch till 115, ie the upper channel line.

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