Aluminum, CENX, and KALU

Aluminum futures defended the breakout from the 2022-2025 big base highlighted in our Oct 28 Charted Market Insights note. This has solidified the breakout and retest zone at 2700-2670 as key support and favors upside for aluminum to 3024 (50% retracement of the March 2022-August 2023 decline) initially and then higher toward 3185-3246 (pattern counts and 61.8% retracement). In our view, this should bode well for Century Aluminum (CENX) and Kaiser Aluminum (KALU).

Chart 1: Aluminum futures: Weekly chart

Century Aluminum (CENX) has struggled with weekly bearish engulfing patterns in October and November but has held near its 38.2% retracement of the April to October rally at 26.31 and the prior high from late 2024 at 35.39, which is a positive sign (Chart 2).

Although CENX saw wild price swings in October, the overall chart pattern remains constructive while above the 38.2% retracement and chart support at 25.39-24.98, with the potential for a sustained breakout from a massive bottoming pattern dating back to early 2009. If CENX can reclaim the 31.75 to 34.52 area, confidence in this 17-year big base increases with upside potential to 40.80 (50% retracement), 50.17 (61.8% retracement), and the pattern count at 57. CENX has improved relative to the S&P 500, which corroborates this developing big base pattern (Chart 3).

This updates our October 24 Straight from the Chart post on CENX.

Chart 2: Century Aluminum (top) and relative to the S&P 500 (bottom)

Chart 3: Century Aluminum (top) and relative to the S&P 500 (bottom)

Kaiser Aluminum (KALU) is positioned to break out from a bullish cup and handle formation. A decisive rally above 97.00-97.60 would confirm this pattern and favor upside to 121-123 (measured move and pattern target). Until then, staying above 88.00-87.89 maintains confidence in the developing handle. KALU may also complete a bigger base from 2022 on a sustained move above 102.42. This would suggest longer-term upside potential toward 130 and then 137-141 (2021 highs). KALU looks bullish relative to the S&P 500 and is in position to break higher from a head and shoulders bottom vs. the broader market (Chart 4).

A big, high volume upside gap on the daily chart from 85.82 down to 81.14 underpins the developing bullish cup and handle pattern (Chart 5).

This updates our October 24 Straight from the Chart post on KALU.

Chart 4: Kaiser Aluminum (KALU) (top) and relative to the S&P 500 (bottom)

Chart 5: Kaiser Aluminum (KALU) with big upside gap