Primary Nickel Futures traded at the London Metals Exchange rallied 0.8% during Tuesday's session to close the day at $25,950 per ton. The gain came on an inside day move, where the intra-day high was lower than the previous day's high price and the low was higher than the previous day's low. Nickel futures also experienced a bullish MACD crossover on the day, where the daily Moving Average Convergence Divergence indicator line (the difference between two exponential moving averages) crosses above the slower Signal line (an exponential average of the MACD line).
Q: How has LME nickel performed in the past, omitting repeat occurrences within 10 trading days, when it has experienced a bullish MACD crossover on an inside day rally?
A: According to the 11 previous occurrences of this event, EventEdge indicates that LME nickel has shown a very strong bullish edge that peaks 10 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the most recent occurrence of the event (Tuesday, Dec. 18, 2007) is Thursday, Jan. 3, 2008.
Nickel has rallied in 91% of the cases (10 of 11) by an average of 5.0% relative to the close on the event date. The overall return of the 11 cases is 4.5%, which, based on the close on the event date ($25,950), provides a target price of $27,117.7.
Note: The one time LME.NI did not rally was a return of 0.0% rather than a decline.
If you would like to see more details of this historical edge, go to www.markethistory.com
Ronish Patel is an analyst with MarketHistory.com.
