Technically Nickel market is under short covering as market has witnessed drop in open interest by 12.48% to settled at 1956 while prices up 14 rupees.
Now MCX Nickel is getting support at 1387.6 and below same could see a test of 1377 levels, and resistance is now likely to be seen at 1405.9, a move above could see prices testing 1413.6.
Nickel yesterday settled up by 1.01% at 1398.3 as new orders for U.S.-made goods accelerated in August, pointing to sustained strength in manufacturing even as economic growth appeared to have slowed in the third quarter because of shortages of raw materials and labor.
The Commerce Department said that factory orders increased 1.2% in August. Data for July was revised higher to show orders rising 0.7% in July instead of gaining 0.4% as previously reported.
The difference between LME cash nickel and the three-month contract flipped to a discount of $1 a tonne after staying in premium since Aug. 25, indicating easing tightness in nearby inventories.
Companies have cut output due to the impact of the domestic power rationing, leading to weak downstream stockpiling before the holidays. The SHFE/LME nickel price ratio inched lower from highs early last week, but rallied amid low inventory and market concerns over further inventory declines amid low prices.
Nickel ore inventory at Chinese ports grew 143,000 wmt from a week earlier to 7.49 million wmt as of September 30. Total Ni content stood at 58,800 mt. Total inventory at seven major ports stood at around 3.68 million wmt, a decline of 37,000 wmt from Friday September 24.
Trading Ideas:
–Nickel trading range for the day is 1377-1413.6.
–Nickel prices remained supported as new orders for U.S.-made goods accelerated in August.
–The difference between LME cash nickel and the three-month contract flipped to a discount of $1 a tonne after staying in premium since Aug. 25.
–Companies have cut output due to the impact of the domestic power rationing, leading to weak downstream stockpiling.
Courtesy: Kedia Commodities
Source: Comodity Online
