Aluminium prices showed volatility throughout the month of October amid not so much improvement in the Global supply scenario. According to International Aluminium Institute (IAI), global daily average primary aluminium output surged to 63200 tonnes in September from a revised 63100 tonnes in August 2009.
A nominal rise in the global production of Aluminium led the prices of the metal move further upside and with that expectation; prices are likely to trade higher in coming month. Till the first week of October, Indian government levied provisional safeguard duty on aluminium flat rolled products at 21 per cent and a duty of 35 per cent on all aluminium foil imports from China.
Primary aluminum production in October rose 0.9% year-on-year to 142,300t compared to 141,000t in same-month last year. Aluminum has not been able to perform as compared to other base metals and could not sustain at higher levels.
The metal witnessed lot of selling pressure in the beginning of the month to drift lower towards its major support at its 200 Day EMA .The counter was provided ground by the same level and has thus retreated from the same.
Though the momentum in the counter is not so strong, and can be called a laggard, but it seems to be picking up of late as can be seen by the breakout from the large pennant formation on Daily charts which itself is quite bullish for the metal.
Prices are seen, heading towards its upper levels of $2100 and then $2325 that is 50% retracement level of its fall since $3400 in July last year.
The only clause that can be attached to up move is the initial resistance of Rs94/kg, which can lead to some correction, but lower levels may again ignite buying and any move above the initial resistance level of Rs94/kg can lead to northbound journey towards the major hurdle of Rs100/kg, so it would be prudent to stay on the long side of the market .
Courtesy: Religare Commodities Start trading in commodities from as low as $50. Join now
