Nickel prices fell for the fourth consecutive day to settle at Rs 1,224 per kg as participants reduced their position as seen by the open interest. The base metal plunged by Rs 78.6 or 6.03 percent on the MCX.
The non-ferrous commodity has been trading lower than 5, 20, 50, 100 and 200 days’ simple moving averages and exponential moving averages on a daily chart. The Relative Strength Index (RSI) is at 28.04, which indicates extreme bearish movement in prices.
Nickel price was weighed down by Chinese efforts to control prices and initiation of Fed’s taper talks.
The International Nickel Study Group (INSG) data showed that the metal deficit widened to 16,000 tonnes in March from a modest 600 tonnes deficit in February.
The US dollar index jumped 0.25 percent to end at 90.01 against the major cross. The dollar index ended with a loss of 0.35 percent through the week.
MCX METLDEX decreased 215 points, or 1.44 percent, to close at 14,688. The index tracks the real-time performance of key base metals.
Kshitij Purohit, Product Manager, Currency and Commodities, CapitalVia Global Research Limited said, “MCX Nickel futures broke out of wedge candlestick pattern on the Lower side on the daily chart and from past few sessions closed negatively. It will continue to go down towards Rs 1,200 or much lower in the coming week, The price closes below 50 SMA on daily charts showing weakness in the prices due to demand and price control by China.”
On the MCX, Nickel delivery for May slumped by Rs 27.30, or 2.18 percent, to settle at Rs 1,224 per kg with a business turnover of 1,303 lots. The same for the June contract slipped by Rs 29.80, or 2.36 percent to Rs 1,232.90 per kg with a turnover of 1,175 lots.
The value of May and June’s contracts traded on Friday was Rs 2,650.39 crore and Rs 557.88 crore, respectively.
The industrial metal settled with a loss of 2.14 percent at $ 16,730 per tonne in London.
Purohit expects MCX Nickel futures likely to continue with a bearish trend towards Rs 1,180 levels. Traders should maintain the stop loss of around Rs 1,260, keeping the target at Rs 1,180 for the upcoming trading week.
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