Trade war... Okay ! Here's where to look for profit

Against the Donald Trump's complaints, US industrial metal producers were the biggest drop.

The president said Thursday he intends to introduce a 25 percent tariff on steel imports and 10 percent on imports of aluminum in the United States. This has caused mass discontent among producers not only in Europe and China, where it is the main import but also among the US producers. A few hours after Trump's announcement from the White House announced that tariff rates are only "intentions" and may not be introduced in their form. This, however, failed to reassure the mining companies. The US Steel Index lost more than 8% in just a few hours after Trump's comment, and today it trades at levels around 43.65 points.

When there is such a volatility in the market, a large number of traders run aside, but great fluctuations create perfect conditions for profits. Where to look for them?

Let's look at the futures of aluminum - 18 March 2018

The metal price has risen steadily over the past two years, outlining a steady upward trend. What we should pay attention to as a trader is the good technical position of the price at the moment and the strong foundation that predicts appreciation of the metal. Considering the main upward trend, horizontal levels of support, the absorbing bar and, in addition, the DeMarker 8 boost signal, the long positions of current levels are perfectly suited to SL at 2050 levels.

Fundamental: If the restrictions on the White House come into force, it will significantly limit the global circulation of metals and will lead to increased stockpiles by companies and to underproduction, as the actual placement of the produce will take place, hard. If we follow the simple logic of supply and demand, less output and increased demand would result in a significant price increase.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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