Last Updated : 01 January 2013 at 15:30 IST
Nickel: Will it be a rags-to-riches story in 2013?
Source :Commodity Online Research desk
Nickel future seems ready for a change in fortune in 2013 as Nickel’s 20% fall in 2012 has made it cheaper than pig iron, a substitute made from low grade ore from Indonesia and the Philippines. The metal is widely used to strengthen stainless steel which in turn gets used in everything from kitchen sinks to aircraft fuel tanks.
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Nickel has been the worst performing metal in base metal complex in the past one year on MCX and LME. And nickel is the only metal in base metal complex that has given negative return in 2012.
Nickel futures have given almost 4% negative return on the MCX while on LME it has given negative 7% return.
Nickel future seems ready for a change in fortune in 2013 as Nickel’s 20% fall in 2012 has made it cheaper than pig iron, a substitute made from low grade ore from Indonesia and the Philippines. The metal is widely used to strengthen stainless steel which in turn gets used in everything from kitchen sinks to aircraft fuel tanks.
Also, Chinese demand and institutional buying is expected to provide support.
Technical Outlook
Technically on weekly charts, nickel futures made a double bottom at Rs.845 levels in the year 2012. It is a clear indication for nickel prices charting upside in 2013 as futures are unable to break Rs.845 levels.
According to Fibonacci retracement, nickel futures have a crucial resistance at 50% level which comes around Rs.1090. If nickel prices sustain above that level then it may move up to Rs.1210 and Rs.1320 levels for the year of 2013.
If nickel futures are unable to sustain at Rs.1090 levels then it may move down till Rs.950-900 levels for short term period.
I expects nickel price on the MCX to trade in the range of Rs 850-1200 levels for the year 2013.
Long term traders are advised to take a long position in nickel futures around Rs 900 with stop loss of Rs 840 and wait for the target of Rs 1200 for the year 2013.
(Ankush Kumar Jain is Research Analyst, Commodity Online)
