Friday, January 4, 2013
we are observing that prices have breached the crucial support of $1680 where the 200 Exponential DMA is placed. Technical oscillators MACD and RSI are in a sell mode. Prices are now trading near the crucial support of $1660 where there are multiple supports of 200 Simple DMA, 78.6% Fibonacci extension and 50% retracement. If the support of $1660 is breached on the downside, we expect prices to first correct up to levels of $1630 which is the 100% Fibonacci extensions and also the 61.8% retracement and then up to levels of $1585 which is the 78.6% retracement. If the prices trades above $1705 entire pattern gets negated.
As the current market scenario suggest nickel formed a pullback that retraced more than 78.6% of the previous fall. It was a channelised pullback. However, the price faced selling pressure near the daily upper Bollinger Band. In terms of the price pattern, it formed an ending diagonal and broke on the downside. Recently, from the daily lower Bollinger Band, nickel bounced towards the upper Band where it faced sharp selling. Thus, nickel seems to have started the next leg on the downside. It can fall towards the 40-weekly exponential moving average (934) and the 20-weekly moving average (926) from a short-term perspective. The high of 977 will act as a key resistance.