MCX Aluminium under long liquidation; Support seen at 134

Technically Aluminium market is under long liquidation as market has witnessed drop in open interest by 2.54% to settled at 3879 while prices down 1.7 rupees.

Now MCX Aluminium is getting support at 134 and below same could see a test of 133.2 level, And resistance is now likely to be seen at 136.1, a move above could see prices testing 137.4.

Aluminium on MCX settled down 1.25% at 134.70 with concerns over global economic growth and U.S.-China trade tensions weighing on the market. Weak data in recent weeks in key global economies, including in top metals consumer China, has stoked fears of a recession.

Stocks slipped on Friday as investors fretted about a broadening global economic slowdown, with sentiment not helped by the absence of any positive signs for a resolution in the U.S.-China trade row.

Now US President Donald Trump said on Thursday he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal. The remarks confirmed comments from administration officials who said the two men were unlikely to meet before the deadline, dampening hopes of a quick trade pact and sparking a drop in U.S stock markets.

Meanwhile prices may see some support after the news that Russian aluminium giant Rusal said on Friday it sees demand for aluminium growing in 2019 with potential for prices to rise. In a filing, the Hong Kong-listed company also said the market for alumina, an oxide key to the aluminium smelting process, may be expected to be more balanced.

Trading Ideas:
–Aluminium trading range for the day is 133.2-137.4.
–Aluminium dropped after a major producer warned about softer demand.
–Norwegian aluminium producer Norsk Hydro warned that an uncertain economic outlook could sap demand in the coming year.
–Aluminum Corp of China , known as Chalco, said it had stopped production at an aluminium smelting plant in eastern China’s Shandong province

Courtesy: Kedia Commodities