LME aluminium may retest resistance at $2,546 in Q3
- The wave iv has taken the shape of a bullish triangle, which will suggest a target of $2,718 once confirmed.
SINGAPORE: LME aluminium may retest a resistance at $2,546 per tonne next quarter, with a good chance of breaking above this level and rising to $2,718.
The uptrend from $1,455 remains strong and steady. It is driven by many motive waves. An impulsive wave 3 is still unfolding.
This fierce wave consists of five smaller waves. The wave iv has taken the shape of a bullish triangle, which will suggest a target of $2,718 once confirmed.
The confirmation will be when the metal breaks above the upper trendline of the pattern, which establishes a resistance around $2,500.
This wave iv looks much sideways compared to the zigzagging wave ii. Such a relation well meets the wave guidelines. The current wave v may be as long as the wave "i", to travel to $2,718.
A retracement analysis on the downtrend from $2,718 also suggests a total reversal of this trend, as the metal briefly pierced above the 86.4% retracement.
A closer examination on the daily chart reveals more precise resistances and supports, with the help of a projection analysis on the wave 3.
The 200% level of $2,463 serves as a pivotal resistance, a break above which could confirm the bullish triangle and a target of $2,691.
Key support is at $2,376, a break below which could cause a fall into $2,235-$2,322 range.
Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
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