Nickel dipped a low of $5,145 a tonne during the last week of February when Inco, a major nickel producer in Canada, announced it will not cut production. The news pushed the metal to $5,145 from $5,510 and the lowest level in three and a half years. The metal gained later to $5,400 a tonne, mainly due to the rally in copper but fell due to a correction at $5,270., a level where the metal will face strong resistance, which is a positive indication.

Another factor favouring the bullish trend in the metal is the position of the relative strength index (RSI). When the metal touched $5,455 three weeks ago, the 21-day RSI has touched a seven-month high at 57. The RSI reading is on a scale of zero to 100. That indicates strength of the rally. Since the upward occurred was after the formation of positive divergence, it is most likely that anegative divergence will occur in the near future. And that will take place when the price crosses the recent top of $5455. This is likely to give a rally of around $400 per tonne. Not only this, price as well as the RSI has also moved above its falling trendline. As far as averages are concerned, the 12-day and 48-day exponential moving average (EMA) are in negative phase. With a likely jump in prices, these averages will enter into positive phase.

Considering the position of price and oscillator charts, it is most likely that the price will go up in the near future. The uptrend is expected to face resistance around $5800 levels. Fundamental reasons that could trigger a rally in nickel is delayed supplies from Russia and Australia. On account of labour problems, Australian nickel exports have been blocked. Around 120 containers, or 2,500 metric tons of nickel product owned by Australian mining company WMC Resources Ltd. (A.WMC) has reportedly been delayed by labour dispute. These factor could push nickelprices upward.y