The important observation to be made on the chart above is that the price of Aluminium has registered a Bearish Head & Shoulder breakdown on its weekly charts.This is an extremely bearish price pattern and this will have a negative effect on the price of aluminium over the near term to short term.
The measuring implication of the pattern suggests that the price can decline to levels of RS 105 and/or RS 102 levels.
The Sell signal given by the MACD indicator and a break below the near term moving average support are some of the other technical indicators that confirms the bearish outlook on the price of aluminium.
We recommend traders to sell 50% at current levels and add to short positions as an when the price pulls back to RS 111.00 -- RS 111.75 levels with a stop loss of RS 112.40 levels for immediate downside targets of RS 108.25 / RS 106 levels.
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