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NICKEL

News & Development LME and MCX Nickel futures mainly traded sideway to bullish during the month of June, as demand has witnessed incline in China and western countries. This has also increased the raw material/output demand in the manufacturing sectors from Philippines and Indonesia for its electronic vehicles car manufacturing sector. However, rising US dollar index since the mid of June month; post the FED decision to remain hawkish on the interest rate till the end of 2023 has weighed on the base metal prices. By istJuly, MCX Nickel prices inclined by 4.21% closing at Rs.1358.8/kg.

Fundamentally 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 United States. European economy is starting to recover with some virus concerns again witnessed after 10 weeks. Global demand for nickel used in batteries is expected to rise 18% this year from 2020, backed by strong sales of electric vehicles (EVs) in China, based on Sumitomo Metal Mining, Japan's biggest nickel smelter. They further added, recent drawdown in LME's nickel stocks has been seen to reflect rising demand for the metal used in batteries, pointing to a drop by more than 30,000 tonnes over the past two months. Nickel is mainly used in stainless steelmaking, butis also a vital ingredient for the lithium-ion batteries used to power EVs, where demand is set to accelerate over coming years. Global demand for nickel is seen increasing by 9.2% in 2021 to 2.58 million tonne, while supply is expected to climb by 5.8% to 2.638 million tonnes. Japan's demand for nickel is projected to rise 15.7% to 167,400 tonnes, while supply is forecast to fall 2.4% to 165,800 tonnes. Simultaneously, the manufacturing and economic data in the United States, China, European Union and India has been reported to be positive over the month which is expected to support Nickel prices.

On the daily chart, the NICKEL prices have been trading in Rising Channel formation for the last couple of days. In the recent trade, the price has tested the resistance at Upper Line of Channel and Upper Bollinger Band, which indicates a reversal in the counter for the medium term. In addition, an oscillator Stochastic RSI is also supportive for the short position with negative crossover. Moreover, on an hourly timeframe, it has formed a Double Top Pattern which supports also the downward trend. Hence, based on the above-mentioned technical structure, one can initiate a short position in MCX Nickel (July) future at CMP 1355 or a rise in the price till 1360 levels can be used as a selling opportunity for the downside target of 1295. However, the bearish view will be negated if MCX SS Nickel (July) future closes above the resistance level of 1386.

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