It is as if a fire was lit under Shanghai aluminium futures prices last week, setting the market alight. It managed a weekly close above horizontal resistance at 12,635 yuan per tonne, above the top of the Andrews pitchfork that has dominated since 2011 and well above the top of the symmetrical triangle inside which the market has consolidated since mid-April. Propped up by Fibonacci retracement support and a rising Ichimoku cloud, moving averages should revert to bullish soon. Momentum has been steadily, though not spectacularly bullish since September, and observed volatility picked up this month. All technical aspects suggest the next leg of this year’s rally has started. Measured targets from the height of the triangle are 13,425 yuan and 14,000 yuan.
Nicole Elliott is a technical analyst