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MCX Nickel under short covering; Support seen at 859.6
Commodity Online | June 14 2019
UPDATED 10:00:08 IST

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Technically Nickel market is under short covering as market has witnessed drop in open interest by 5.09% to settled at 6026 while prices up 0.9 rupees.

Now MCX Nickel is getting support at 859.6 and below same could see a test of 851.8 level, And resistance is now likely to be seen at 880.1, a move above could see prices testing 892.8.

Nickel prices rallied amid concerns about delayed shipments of nickel ore on Indonesia floods. Nickel inventories across SHFE-approved warehouses expanded 4,935 mt on June 13, and this grew uncertainties around prices.

An open import arbitrage window is likely to accelerate an influx of cargoes from the bonded stocks to the domestic market this week. Global nickel consumption estimated at 2.4 million tonnes this year, include overstocking of stainless steel by producers earlier in 2019.

Also a major influence is the trade dispute between the United States and China, the world's two largest economies, and its potential to disrupt growth and demand. Nickel stocks in warehouses monitored by the Shanghai Futures Exchange, at around 9,000 tonnes, are a fifth of the level in January 2018.

Investors took heart from China's move to ease financing rules to boost local government spending on public works, and a possible cut in U.S. interest rates. While U.S. President Donald Trump said he was ready to impose more punitive tariffs on Chinese imports, Beijing said it is open for more trade talks with Washington.

China said it would allow local governments to use proceeds from special bonds as capital for major investment projects, in a bid to support the slowing economy amid an escalating trade war with the United States. 

Trading Ideas:
--Nickel trading range for the day is 851.8-892.8.
--Nickel prices rallied amid concerns about delayed shipments of nickel ore on Indonesia floods.
--Investors took heart from China's move to ease financing rules to boost local government spending on public works, and a possible cut in U.S. interest rates.
--Nickel inventories across SHFE-approved warehouses expanded 4,935 mt on June 13, and this grew uncertainties around prices.

Courtesy: Kedia Commodities

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