MCX Nickel has formed the third leg of the pullback and has reached the upper end of the channel. In terms of price pattern nickel has formed an ending diagonal which marks the end of the third leg. From the upper end of the channel nickel is being pushed down. The daily upper Bollinger Band is also putting pressure on the price. The daily momentum indicator is showing negative divergence and has given a bearish crossover. The 20 day moving average (DMA; Rs1,003) and the 40 day exponential moving average (DEMA; Rs987.5) are the immediate supports. Overall the upside looks caped at Rs1,040. The Fibonacci targets for the next move down would be Rs965 – 945 ie 38.2% and 50% retracement respectively.
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