Aluminium Surges to 2011 Highs Hindalco Industries Ltd NSE: HINDALCO up 4%

Hindalco Industries Ltd NSE: HINDALCO was one of the biggest gainers in trade today. The stock was higher by close to 4% on the back of high volumes which is being seen as a bullish signal. The stock was one of the biggest gainers on the NSE Nifty in trade today. Global aluminium prices have surged by more than 20% over the last few weeks since the US unveiled sanctions on Russia which have led to a huge rally on metal stocks globally.

The rally on the stock was on the back of aluminium prices rising to their highest levels since 2011. The rise in aluminium prices were on the back of the US sanctions on Russia which have led to shortages of aluminium in the world markets which is being seen as a huge positive for Hindalco Industries Ltd NSE: HINDALCO in the short term. It is imperative to state that Rusal which is the biggest aluminium producer in the world is on the verge of a collapse which would hit aluminium supply across the globe. The weaker dollar is also being seen as an impetus for the rally in global commodity prices. Many analysts on the street believe that the shortage in the world markets would lead to higher demand for Hindalco Industries Ltd NSE: HINDALCO and high prices are a huge positive for the companys’ stock-pile and top line in the coming quarters as demand from China continues to remain robust for all commodities in the near term.

On the charts, the stock for Hindalco Industries Ltd NSE: HINDALCO has given a breakout and has moved above both its 200 day and 50 day moving averages which is being seen as a huge positive. The RSI for the stock continues to be in a rising trend which is indicative of the strength of the current up-move and continues to remain below the over-bought zone on the daily charts which is a positive according to analysts on the street. The high volumes and the momentum indicators suggest fresh buying at current levels. Analysts believe the stock could head to levels of Rs.270 if it were able to give a closing above the levels of Rs. 257 in the near term. The stock continues to see support emerge at levels of Rs.241 which is also the 200 day moving average for the stock.

On the options front Hindalco Industries Ltd NSE: HINDALCO continues to see huge open interest buildup at the 260CE which many believe would be a resistance. On the put side 240 put continues to see highest open interest which is indicative of the strong support at those levels.