As can be seen from the chart, nickel retraced nearly 61.8% of the previous decline (from Rs1,086 to Rs848). The move unfolded in a channelised manner. However, the base metal has now entered a corrective phase. It has broken down from the channel. The daily momentum indicator is showing a negative divergence and is in a sell mode. However, nickel has taken support near the 40-daily exponential moving average and the daily lower Bollinger Band. Thus, a minor-degree bounce till the 20- daily moving average (Rs965) is possible, which will be an opportunity to initiate a fresh short position. The target on the downside remains at Rs902, ie the 61.8% retracement of the channelised rise. The reversal can be trailed to Rs989.
