Nifty Metal sector is showing medium term weakness as the overall momentum slows down as it has strong correlation with Global Metal prices. Base metals slid on Tuesday with copper and nickel hitting multi-week lows. Daily Trading Sentiment maintain negative for the 5th consecutive trading session.
Three-month copper on the London Metal Exchange ended down 1.8% at $7,078/tonne, having hit its weakest since Dec. 22 at $7,035.
Nickel closed down 2.4% at $12,550, having slid more than 5 percent to its lowest since Dec. 29 at $12,190.
Possibly the weakness in the base prices might trigger a possible sector rotation from CNX Metals to some other sector.
From the Trading inventory perspective higher timeframes went long to too long in this counter possibly any momentum loss in this counter could trigger profit booking (long liquidation) from this counter resulting in a 6-10% crash in Nifty Metal indices.
