Is Nickel over-extended while making All Time High? Let us find it out through this blog post.
At the time of writing this post, Nickel (NI) is trading at around 18,500 level as shown below in the price chart for Nickel. The all time high for the commodity Nickel was 16,688 printed in the month of April 2018.
Nickel touches (tested) the above mentioned price level of 16,688 very recently, only on the last month, on 8th of August 2019, to be precise and promptly came back a little to the price level of 15,023 on Monday the 12th of August 2019. A sweet correction of 1,675 points (10.03%) in just 3 days.
From that swing low of 15,023, Nickel jumped up and convincingly broke the previous all time high, the price level of 16,688 absolutely recently, only on the last day of the month, on Friday the 30th of August 2019, to be precise. Today the date is 3rd of September 2019 and Nickel has moved up in last 3 days a humongous 2,459 points (equivalent to 15.01%).
Now the all important question: is Nickel over-extended while making All Time High?
To get an answer to the posted question, let us dig further by performing the following tasks:
1. Analyze Nickel’s price action through Standard Error Channel and
2. Project the price if certain technical things take place.
Lets do it one at a time:
1. Analyze Nickel’s price action through Standard Error Channel: To know whether the price action of Nickel is over-extended or not we drew a Standard Error Channel from the swing low of February 2016 till date. As demonstrated in the chart, price had got support in the Standard Error Channel on the following dates:
a) May 2017, June 2017, July 2017 and again on
b) November 2018, December 2018, January 2019 and lastly on
c) May 2019, June 2019, July 2019.
So we can say that the channel is a good fit so far. The only time price did close above the Standard Error Channel was on May 2018 when it faced resistance and came back immediately to test the lower channel. Now for the second time, close price of Nickel is above the Standard Error Channel and that happened on 30 august 2019. It is now interesting to observe whether the price of Nickel is getting resistance beyond the top of the channel as it did face the same on May 2018. If it happens so in recent future then we need to see that the price of Nickel closing below the Standard Error Channel and coming back to test the low of the channel.
2. Project the price if certain technical things take place: If the price of Nickel is coming back and closing below the Standard Error Channel on a monthly basis and its low is taken out then the price objectives for Nickel can be found at 16,688 level, 16,080 level, 15,842 level and 15,226 level. If not then Nickel can continue to print higher highs.
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