Tin Seen Extending Rally on Moving Averages: Technical Analysis

Tin is poised to advance for a third straight month to the highest level since January, according to technical analysis by Trading Central SA.

Moving averages signal that futures in London will climb to $25,250 a metric ton, matching this year’s high on Jan. 17, said Ludwig Garric, head of commodity research at the Paris-based company, who correctly predicted in May a slump in nickel to a four-year low.

“The near-term outlook favors the bull camp,” Garric said in an e-mail yesterday. “Prices have been making successive higher-highs and higher-lows since July. In addition, the 20-day moving average has crossed above the 50-day moving average and both are heading higher, signaling a bullish trend.”

The metal, used in everything from televisions to smartphones, gained 7.9 percent in the two months through Aug. 30 and reached a five-month high on Sept. 9 amid concerns that new trading rules will curb shipments from Indonesia, which accounts for 40 percent of global supply. Futures traded $22,425 a ton on the London Metal Exchange today.

In technical analysis, investors and analysts use charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Moving averages point to changes in price trends. When the 20-day average breaks above the 50-day average, for example, the move suggests that prices may rise, and vice versa.

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