MI Comment: Tech buying sees aluminium move higher

Among the LME complex aluminium was the greatest beneficiary of a strong set of US employment figures on Friday, following oil and agriculturals higher in the pm session. As we signed off last, the light metal had clipped a high of 2803, where it hesitated and drifted back. It was in the afternoon that the market tried again, clearing the 100-day moving average at 2790 and psychological resistance c. 2800. As Cliff Green Consultancy had written on Thursday, short term technical trends had turned up and the trading strategists next looked for a test of June's highs around 2830. It was technically-driven CTAs who bid prices to a high of 2820 as they covered shorts. Nearby spreads were unchanged overall, while forward backwardations nudged wider on outright trade selling. 2008 gained $0.50/mth, 2009 up to $1.50/mth and 2010 put on $1.00/mth. Two parties remained in the 30-40% bracket of the LME's WC warrant banding report. In patchy trading in Asia prices slipped initially to 2808 in the early hours of Monday morning, though the fall attracted unusually strong interest ahead of London's reopening with LME Select clocking up turnover of 375 lots before 07:00 am. Over the course of London's premarket values lifted to a high so far of 2834 on electronic turnover approaching 2,000 lots. The broad range of the past 12 months remained unbroken and medium-term trends were 'clearly flat', wrote CGC in Friday's closing update. However, a decisive move above 2840 could extend gains towards the 2900 area, they suggested.