Nickel enters into a potential bullish trend

Nickel enters into a potential bullish trend
Commodity Online | July 18 2017
UPDATED

Nickel, amongst the entire base metals, has been the only commodity to have remain suppressed long after the commodity market bottom. The sharp gains in the metal, which rallied over 9% in the past week, leads up to explore the possibility of a potential long term upside in the metal.


Nickel has been unable to pick off largely due to an oversupplied market and lack of demand from major players across the globe. Stocks on LME and SHFE continue to remain at elevated levels which keeping prices near multi year lows.


Nickel which is mainly used as an alloy and in the production of steel has also suffered from dropping steel prices. While analysts predicted that the market will remain in supply late into next year, demand from major consumers such as China and US could push prices significantly higher. The pressing point to note is that any quick moves could draw back investor interest and carry prices further higher in the short term.


LME Nickel is trading at $9687.50/ton, up 0.68% while MCX Nickel is at Rs.620.80/kg, up about half a percent.


Technically, prices have rallied recently gaining over 9% in just the previous week, prices are up almost 12% from its lows seen in mid-June at Rs.558.60/kg. Prices have formed an ‘inverted head and shoulders’ on the daily charts which implies a major reversal in the short-medium term trend.







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