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Nickel Price action indicates the Overextended Trend in Metals

Price action in daily chart point out the over extended trend

Geopolitical jitters influenced Institutions to park their liquidity into Base metals and other safe heaven assets. Nickel is one of those assets that benefited from “run to safe heaven behavior”. Nickel prices rallied from 575 to 790 during the period of June – September (within 5 months). The Uptrend we are witnessing in daily chart is an Intermediate trend (spanning from weeks – Months) as per Dow Theory.

Recently Price action is showing signs of over extension, the selloff we are seeing in daily chart (especially the big blue candle) is larger and volatile than previous corrections and consolidations that happen as part of a trend. The main reason behind the selloff is liquidation by market participants, especially big money players – Though it’s not obvious in daily chart, we can spot their activity and involvement in lower time frame. We cover the technique of Identiying Big money activity in our premium course

You can also notice that many indicators have not shown any signs of trend exhaustion, but price action is suggesting us to stay cautious. This is a good example to point out the edge price action offers compared to lagging indicators.

Will the uptrend continue or reverses? For answer, we need watch the developing Price action in coming weeks. I am expecting the Prices to correct or go into sideways, but the main obstacle is geopolitical flows, if it continues to influence the market action then prices might rise again. As a Price action trader, I don’t predict – instead I would try to catch good directional trades.

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About the Author:

Balaji is a Speculator, Investor and Trader (All in All!!!) and self published author. Trading in the Markets since decade, have seen more ups and downs along with institutional trader's lifestyle. He usually trades Nifty, Bank Nifty, Commodities, Futures cum Options around both Indian and global Markets. Balaji applies highly analytical and systematic Price Action strategies He blogs passionately about Trading strategies, Price Action Trading, Technical analysis, Macro events, Market setups, Financial and Economical topics. Apart from Trading and Blogging, Balaji also mentors aspiring Traders and Investors on becoming successful in highly competitive financial Markets.

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