Aluminum May Gain to $2,541, Barclays Says

Jan. 26 （Bloomberg） -- Aluminum may climb to its January high of $2,541 a metric ton as the daily momentum is “rolling higher,” according to technical analysis by Barclays Capital.

“Daily momentum is rolling higher from bearish extremes” and support is building after prices rebounded from a low of $2,374 on Jan. 20, Barclays said in a report on Jan. 24. Daily momentum indicators include stochastic charts.

Aluminum for three-month delivery rose $27.50, or 1.2 percent, to $2,388.50 a ton on the London Metal Exchange by 5:58 a.m. That left the metal, used in products from beverage cans to aircraft, down 3.3 percent this month. Prices gained 11 percent in 2010, climbing for a second year.

“We look to enter long positions over the $2,350/77 area and expect gains through nearby resistance in the $2,470 area to target the near-term high of $2,541,” Barclays said.

In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. Resistance refers to a level where sell orders may be clustered, while support denotes a level where there might be buy orders.