LME aluminium may hover above $2,042

SINGAPORE: LME aluminium may hover above a support at $2,042 per tonne, or bounce towards a resistance at $2,106, as a sharp fall from $2,267 could have more or less completed.

The support is provided by the 86.4 percent retracement of an uptrend from $2,007 to $2,267. It still holds after two attacks by the bears. The bearish momentum could have dissipated and a decent bounce is due.

Wave pattern suggests the completion of a five-wave cycle. However, the wave 5 looks a bit too short compared to the wave 1. A break below $2,042 could signal the extension of the wave 5 towards $2,007.