Trading strategies for nickel and lead by Tradebulls Securities

Any breach below 1,340-1,350 would crash Nickel's prices till 1,300

Gold, in COMEX, managed to break $1,800 on the upside, on Tuesday, but lost altitude as other asset classes saw sharp reversal. Metals, as well as energy class, saw sharp decline which sent gold and silver running for cover. We saw USD pushing decent gains. However, gold has, once again, managed to trade near $1,800 and we believe, slowly and steadily, gold will try to climb back up. Currently, gold bulls and bears are on level playing field with gold crashing below $1,780 will give bears upper hand while prices above $1,820 will give bulls upper hand. We recommend intraday any dip to go long with expected target of 48,000. Previous resistance of Rs 47,300 has now become support and gold should hold its head above water as long as it is trading above its support of Rs 47,300.

Silver saw a steep fall on Tuesday after outside market Crude and base metals witnessed steep fall. US ISM Manufacturing came weaker than expected but failed to lift precious metals. After a three-day uptrend, Silver prices lost momentum and are near 21 EMA and struggling to go past 100 EMA. Silver has support around 69,000 which is the rising trendline taken from the lows of 67,150 to 67,800. The level of 71,700 is the resistance and silver needs to break that level for any upside momentum.

Crude oil prices slipped off driven by profit-taking in response to multi-year highs reached after OPEC+ producers clashed over plans to raise supply to meet rising global demand. Collapse of the talks has introduced uncertainty into the group's production path. Buyers of the crude are already feeling the pinch, as Saudi Aramco raised the official selling price of Arab Light crude by 80 cents a barrel to $2.7 above the regional benchmark in its main market of Asia. Tight control over oil by cartel and the dispute shows that supply will not increase in August which will push oil prices up.

Natural Gas, after rallying and touching fresh new high on Tuesday, slipped off and we continue to see lots of noisy environment. Forecasts pointed to milder weather and lower demand over the next two weeks than previously expected which is why we have seen pullback in Natural gas prices. Technically, the market is under long liquidation as the market has witnessed a drop in open interest by -22.15 per cent.

Recommendations

Sell Nickel July below 1,340 | TGT: 1,300 | Stop loss: 1,365

Nickel’s previous swing high and resistance in the month of June was 1,340-1,350. This range has now become support zone in the month of July. Any breach below these support zone would crash the prices till 1,300. So, we would recommend short positions in July contract below 1,340 for expected down move till 1,300 and stoploss of 1,365 on a closing basis.

Sell Lead July below 177 | TGT: 173 | Stop loss: 181

Lead has support around 177 and in the month of July, it has managed to bounce back from that level. Prices are now unable to sustain above 181 but any reversal will only come below its support of 177 and so we recommend short below 177 for expected target of 173 and stoploss of 181 on a closing basis.

Disclaimer: Bhavik Patel is Senior Commodity/Currency Research Analyst at TradeBulls Securities.Views are personal.