Thje nickel market is one of the better commodity exposures you can take, and best of all the market price for nickel has reached low levels. This makes a great period to buy nickel as a commodity exposure, though I would not be surprised if the metal pulls back again to test its support once again, particularly as other metals are still yet to bottom. I would caution that nickel miners will also take some time to shine, even if nickel prices are the first to recover among the base metals.I don't see downside below the red line on the chart because its a very firm support. There is a number of reasons nickel is good:
1. There are a number of attractive projects to invest in WA
2. The market is set for a good rally
3. Nickel is used in stainless steel, and a recent development is the use of stainless steel in the external and internal facades of most buildings. Buildings being BIG, mean that the intensity of consumption in most countries, but particularly developing countries like China, is really taking off. Of course there is a lot of nickel around as well, but there are supply constraints as well.
4. Its a volatile commodity. Once it falls back to support once more I can see it rallying to $25,000/tonne, previous support acting as resistance. It will reach $33,000/tonne in 2009, and I suggest a few years later it will reach that previous high around $54,500/tonne. I don't see this commodities boom over by any means.
-----------------------------------------------
Andrew Sheldon www.sheldonthinks.com
1. There are a number of attractive projects to invest in WA
2. The market is set for a good rally
3. Nickel is used in stainless steel, and a recent development is the use of stainless steel in the external and internal facades of most buildings. Buildings being BIG, mean that the intensity of consumption in most countries, but particularly developing countries like China, is really taking off. Of course there is a lot of nickel around as well, but there are supply constraints as well.
4. Its a volatile commodity. Once it falls back to support once more I can see it rallying to $25,000/tonne, previous support acting as resistance. It will reach $33,000/tonne in 2009, and I suggest a few years later it will reach that previous high around $54,500/tonne. I don't see this commodities boom over by any means.
-----------------------------------------------
Andrew Sheldon www.sheldonthinks.com
No comments:
Post a Comment