MCX Nickel market under short covering
Commodity Online | November 08 2016
UPDATED 10:31:29 IST

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Nickel settled up by 7.12% at 747.7 as prices got a boost from concerns about production in the Philippines, the world’s largest supplier of the metal. The Philippine government’s head of mining is expected to decide soon on the fate of several mines related to alleged violations of environmental rules.

Prices also gained as risk appetite improved after the Federal Bureau of Investigation said no new evidence has been found to warrant charges against U.S. presidential candidate Hillary Clinton. Robust Chinese demand for nickel and other metals on signs of economic stabilization in the world’s largest consumer of metals has broadly supported a price rebound from multiyear lows hit earlier this year. LME Nickel stocks fell 546 tonnes to 363,162 tonnes and cancelled warrants dropped 522 tonnes to 120,462 tonnes. There were violent clashes in Jakarta, the capital of Indonesia, over the weekend after the city’s governor was accused of blasphemy; these have given rise to concerns about ferronickel supply from the country.

The European Central Bank's exceptionally loose monetary policy remains appropriate, a large majority of academics said in a survey, countering German experts' dim view of the ECB's stance. A council of experts that advises Chancellor Angela Merkel's government said last week that the ECB should scale back its stimulus program of bond purchases given the extent of the bloc's economic recovery.

Technically market is under short covering as market has witnessed drop in open interest by -11.8% to settled at 10806 while prices up 49.7 rupee, now Nickel is getting support at 716.6 and below same could see a test of 685.6 level, and resistance is now likely to be seen at 764.4, a move above could see prices testing 781.2.

Trading Ideas:
--Nickel trading range for the day is 685.6-781.2.
--Nickel prices gained on the back of positive outlooks for steelmaking raw materials coking coal and iron ore.
--Nickel stocks fell 546 tonnes to 363,162 tonnes and cancelled warrants dropped 522 tonnes to 120,462 tonnes.
--Markets are attempting to strike a balance between a Clinton win and the possibility of a sell-off in commodities if Trump is elected.

Courtesy: Kedia Commodities