Technically Nickel market is under long liquidation as market has witnessed drop in open interest by 2.69% to settled at 9956 while prices down 16.2 rupees.
Now MCX Nickel is getting support at 795.1 and below same could see a test of 787.5 levels and resistance is now likely to be seen at 815.9, a move above could see prices testing 829.1.
Nickel on MCX settled down -1.98% at 802.80 in the line of expectation as trader preferred to book profit after pushing the metal to its highest level in 2-1/2 years in the previous session.
While sentiments still remain firm as still Four nickel mines in the Philippines, remain shut on environmental grounds, an official said, while Japan's Sumitomo Corp 8053.T suspended output at a mine in Madagascar following a cyclone.
While as per Societe Generale update There's good demand for nickel coupled with some supply tightness coming through because of mine closures in the Philippines. The market is in a deficit and that will continue.
Meanwhile funds have ramped up bets on higher prices, doubling their net long position in LME nickel from a low in December to 29746 contracts as of Jan. 5. Also Nickel stocks in Shanghai Futures Exchange warehouses stood at 48,920 tonnes as of Jan. 5 versus over 90,000 tonnes a year ago.
LME nickel stocks at 368,292 tonnes are down from levels above 470,000 tonnes in June 2015, but double levels seen in May 2013. ShFE Nickel dropped more than 2 percent to a 3-day low, while LME nickel recovered from an overnight selloff to trade 0.3 percent firmer at $12,660 a tonne.
--Nickel trading range for the day is 787.5-829.1.
--Nickel dropped on profit booking after rise in LME stocks after prices gained on concerns over low stock levels and production outages.
--Four nickel mines in the Zambales region of the Philippines, remain shut on environmental grounds, an official said.
--Deliverable ShFE nickel warehouse stocks stood at 48,920 tonnes as of Jan. 5, compared with over 90,000 tonnes a year ago.
Courtesy: Kedia Commodities