Detailed Report on Nickel
Bottom fisher can grab the opportunity to buy and
accumulate Nickel in panic, retracement may starts soon
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Lot size: 250
Value: 140000*
Risk: 10000*
Margin: 10000-15000
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*Approx
Nickel
We have seen positive momentum in base metals in last few days on the
verge of turnaround in the bias of global market. Rally in equity market,
positive sign and growth from data prospects in china (as china consumes almost
40% of the global production) supported base metals especially, Copper, Zinc,
Lead and Aluminium. We have seen a good consolidation phase in Nickel from last
4-5 months at lower levels after continuous fall from 1204 mark. It made a low
of 520.20 and currently June contract is trading around 570. There is also a
news flow on Bloomberg that Workers at South32 Ltd.’s Cerro Matoso, the world’s
second-biggest ferro-nickel mine, voted to take strike action amid a dispute
over negotiations on a wage agreement. Members of the Sintracerromatoso union
approved the move at the operation in northern Colombia, the union’s negotiator
Eder Blanco confirmed in a text message. A strike must begin before June 14,
and a deal to avert the action could be reached before then. A previous strike
at Cerro Matoso in April 2015 caused output to fall, leading to an increase in
global prices. The nickel complex is among the worlds largest, with output of
27,200 metric tons in the nine months to March 31. Perth-based South32 will
continue to seek a resolution of the dispute, spokesman Tony Johnson said by
phone. Even as nickel prices rebounded 11% since touching a 13-year low in
February, many producers continue to be loss-making. About 70% of global output
is still unprofitable, according to GMK Norilsk Nickel PJSC, one of the world’s
largest producers. South32 is seeking to cut operating costs at Cerro Matoso by
about a third and will reduce the number of employees and contractors by about
350 by the end of July, equivalent to 18% of the asset’s staff at June 30,
2015, the producer said in February. Talks with Sintracerromatoso, the mine’s
largest union, had centered on a company proposal to cut benefits and peg this
year’s salary increase to 50% of Colombia’s 2015 year-end inflation rate of
6.77%, union president Domingo Hernandez said earlier this month.
Technically, Nickel is forming double
bottom pattern on weekly chart having resistance at 640---655 while we consider
550---520 as major support or we call it as a rock bottom for Nickel. Nickel
already falls from 1200—520 and now we will expect dead cat bounce in Nickel
from lower levels. Continue positive momentum in equity market and
strengthening of global market could be supportive for base metal in near terms
along with above news also could be supportive for Nickel. If everything goes
right then we will see upside rally in Nickel till 620---630 and then to 655
mark in days to come. MACD and RSI on weekly chart too indicate positive diversion
and chances are bright for U-turn from lower levels but trade with levels only.
Nickel has crucial support at 520. Three consecutive closes + weekly close
below 520 will take to 450---420 mark in coming weeks. On seeing chart and
current levels we will not recommend our positional traders to sell Nickel at
these rates but we will find an opportunity to grab at lower levels. Nimble
traders can buy and accumulate Nickel June contract in panic around 560---550
with stop loss below 520 on closing basis for the initial target of 620---655.
Recommendation
Buy Nickel
(June) around 560---550. Stop loss 520. Target 620---655
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