Yesterday, the black metal sector saw a strong rebound, with reduced positions and rising prices bringing the market back into its previous consolidation range. Overnight trading showed a slight increase in positions, indicating a mildly bullish sentiment.

Key Insights:

  • Rebound Within Range: The recent price movement suggests a return to the earlier trading range, likely due to the upcoming delivery month and the alignment of futures with spot prices. This points to a temporary floor beneath the market, with limited upside potential due to a lack of strong upward momentum.
  • Trend Outlook: Our overall bearish view remains unchanged. On the daily chart, the market continues to trade within the 3250-3380 range, with 3330 acting as significant resistance. Although there was an attempt to break 3330, it failed to push higher. The 3250 level remains strong support.
  • Limited Upside Potential: We assess that the probability of a breakout above 3380 is low, and any upside from this level may be capped.

Strategy:

  • Maintain Bearish Stance: As per our previous strategy, we continue to favor selling on rallies rather than taking long positions. The overall market remains range-bound, and a breakout upwards seems unlikely at this stage. Keep positioning for potential downward movement.

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