IGI Logo

NICKEL

LME and MCX Nickel futures initially traded higher and later witnessed decline during the month of February, as demand has once again witnessed decline due to strong US Dollar Index. This has also reduced the raw material/output demand in the manufacturing sectors from Philippines and Indonesia for its electronic vehicles car manufacturing sector. Moreover, the demand from the western countries has been relatively sluggish in the past week with reports of rise in covid-19 cases along with rising bond yields and global market sell-offs. By 1st March, MCX Nickel prices inclined by 4.14% closing at Rs.1357/kg. For the month ahead, we are expecting LME and MCX Nickel futures to witness uptrend with reports of higher demand from the battery sector in Europe. Easing worries in the European Union, China and United States is expected to strengthen the demand for Cobalt, Lithium and Nickel. However, rising US Dollar Index due to rising global bond yields has made the imports of raw material imports more expensive that can weaken the demand for base metals in the global markets in the near future. China's annual session of parliament will chart a course for economic recovery and unveil a five-year plan to fend off stagnation, as Strategic rivalry with the United States spurs a shift to reliance on consumption and home-grown technology; this is also estimated to support global base metal prices in the longer duration. High spending on the infrastructure sector in India with recovered demand in the automobile sector for e-vehicles is forecasted to support prices from the lower levels. Huge demand for iron ore and steel in various industries and defence sector will be an added factor to support the prices of Nickel in the coming weeks. Though global uncertainties continue to weigh on base metal markets in the near future, however, demand for Nickel is expected to rise in the longer duration with positive GDP growth forecasts and economic indicators globally.

On the daily chart, MCX Nickel (Mar) future has been trading in bullish trend from last couple of days with Higher Highs & Higher Lows formation, which indicates positive strength for the near term. Moreover, the price has also found the support at Middle Bollinger Band formation and 21 days Simple Moving Averages, which supports the bullish trend. The price has also traded above Ichimoku Cloud formation, which suggests bullish sentiments for the long term prospect. In additions, a momentum indicator RSI (14) & MACD witnessed positive crossover on the daily chart. So, based on the above technical structure one can initiate a long position in MCX NICKEL (Mar) future at CMP 1339 or a fall in the prices till 1330 levels can be used as a buying opportunity for the upside target of 1390. However, the bullish view will be negated if MCX NICKEL (Mar) closes below the support of 1305.

CPO

MCX CPO prices had traded higher during the month of February, as there had been increased buying in the domestic market for vegetable oils including Mustard and Refined Soy Oil. Stronger rupee with respect to dollar had led to support higher imports of vegetable oil. According to Solvent Extractors Association (SEA), Palm Oil Imports rose by 1.28% in Jan’21 to 7.80 lakh tons from 7.70 lakh tons in Jan’21. Similarly, imports in Crude Palm Oil for the year (November 2020-January 2021) were reported higher by 7.96% at 21.69 lakh tons compared to 20.09 lakh tons in corresponding period last year. Moreover, the Government of India had reduced the import duties on Crude Palm Oil which had improved the domestic demand. By 1st March, MCX CPO futures closed at Rs.1053.8/kg, higher by 11.39% compared to Rs.946/kg reported on 29th January. Fundamentally for the month ahead, we expect MCX CPO futures to be bullish as there is firm demand from India and China along with rise in crude oil prices. However, Global Crude prices could see some corrections in the near future as OPEC is likely to ease supply cuts that could bring some relief to the buyers. Elsewhere, there is slow rise in palm oil stocks and production in Malaysia, with greater rise in exports of palm oil in Malaysia and Indonesia; which could be the key factor to help support the prices. As per MPOB data, CPO production has been reported at 1,126,629 tonnes for Jan’21, lower compared to 1,171,534 tonnes reported in Jan’20. Crude Palm Oil exports from Malaysia during Jan’21 has been reported at 192,895 tonnes, higher compared to 180,563 tonnes of Jan’20, but lower compared to Dec’20 of 744,698 tonnes. Rising US Dollar index could also dampen demand from China and Europe. Overall, we expect bearish trend in MCX Crude Palm Oil prices for the coming month.

On the daily chart, MCX CPO has given Rising Trend line Breakout and sustained above it, which indicates bullish set-up in the counter. Moreover, the price has also traded above Ichimoku Cloud formation with positive crossover between conversion line & base line , which suggests bullish trend for long term. Furthermore, a momentum indicator RSI (14) reading is at 68.83 levels and Stochastic oscillator is showing positive crossover, which supports the bullish trend for the near term. So, based on the above technical structure one can initiate a long position in MCX CPO (Mar) future at CMP 1041 or a fall in the prices till 1035 levels can be used as a buying opportunity for the upside target of 1085. However, the bullish view will be negated if MCX CPO (Mar) closes below the support of 1010.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://choicebroking.in/disclaimer

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer