LME aluminium may rise into $3,041-$3,228 range in Q4

SINGAPORE: LME aluminium may rise into a range of $3,041 to $3,228 per tonne next quarter, as suggested by its wave pattern and a projection analysis.

The metal is riding on a powerful wave C from $1,455, which is the third wave of a three-wave cycle from the November 2015 low of $1,432.50.

Many smaller waves make up the wave C. The third wave, the wave 3, is unfolding. A projection analysis on the wave C reveals a brief piercing above a weak resistance at $2,925.

With the metal approaching this level again, it is likely to overcome this barrier and surge into the target zone. The wave 3 may complete in the zone, most likely, around $3,228, as suggested by a rising trendline.

The metal may experience a decent correction around $3,228, which will be driven by a wave 4. The gains in the fourth quarter could be greatly discounted, due to this correction.

Support is at $2,828, a break below which may be followed by a shallow drop into the support zone of $2,718-$2,738. Strategically, a rise to $2,940 may confirm a break above $2,925 and the target of $3,041.

On the daily chart, a projection analysis on the uptrend from $1,725 reveals a narrower target zone of $3,060-$3,201, which is also pointed at by a rising trendline.

The correction triggered by the nearest resistance at $2,973 may have ended around a support at $2,832. The uptrend has resumed.

The resistance at $3,060 is expected to trigger a shallow correction towards $2,973. The uptrend, however, would still remain intact.

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.