Nickel July – Will bulls achieve silvery ambitions?
CMP: Rs 579.30 (As on 02nd Jun 2017)
Strategy: Buy > Rs 590
Targets: Rs 717-810
Stop Loss: < Rs 515
Nickel…the industrial metal also known as the distant cousin of Silver due to its color and shine is ironically facing the same fate in terms of price and trend as its heavyweight relative. After scoring an all time high in April 2011, Silver prices have seen a decline of almost 65%. Nickel too had followed in the footsteps with nearly 60% fall during the same time period. Let us gauge that underlying scope of a reversal in Nickel prices if any positive news flow starts on a possible rise in demand in future.
First things first, weak fundamentals have continuously dominated the price trend in Nickel and what we have seen is a state of oversupply from leading producers Indonesia and Philippines. More importantly, at the same time, demand has not seen any magical growth, not even in small spells. This state is not likely to change overnight BUT it seems that the time has now come for few small spells of that much needed spike in demand before a complete trend reversal. Technically, the bearish trend and few pockets of sluggishness have completely distorted the chart. The oversold zone has not triggered any important bounce backs and what we saw are just few disheartened attempts within a particular day or week. Through Elliott wave analysis, it seems we have cracked the puzzle! On weekly chart, a double three pattern has actually shaped-up and if the placements are right, we guess this is the completion point and a strong reversal is awaiting. The oversold zone & their lackluster behavior discussed above are typical characteristics of a ‘double three pattern’ during its formation. This pattern is going to be the base formation when Nickel charts will be viewed after a quarter by the poor trend followers! Act now and do not settle for less than being a ‘trend maker’!
We recommend buying in Nickel July contract above Rs 590 for targets in the range of Rs 717-810. Maintain stop loss below Rs 515.