March 9 (Bloomberg) -- Nickel's "momentum roll over" after prices fell from a 20-month high last week signals further declines, according to technical analysis by Barclays Capital.
The nine-day relative strength index for nickel last week rose above 80 for the third time since April, signaling a "near term correction," Barclays analyst Phil Roberts in London wrote in a report dated yesterday. An RSI reading of 70 or above indicates to some analysts that prices are ready to drop.
Nickel for delivery in three months has "support" at $20,695 a metric ton, representing a "buying opportunity," according to the Barclays report. The bank has an "upside bias" for nickel to climb to $25,000 a ton or $26,000 a ton. The last time nickel traded at $25,000 was in May 2008.
Nickel for delivery in three months fell 2 percent to $21,860 a ton at 11:05 a.m. in London. Prices on March 4 rose to $23,040 a ton, the highest level since June 19, 2008 and have climbed 18 percent this year, the most among the six main metals traded on the London Metal Exchange.
In technical analysis, charts of trading patterns and prices are used to predict changes in a security, commodity, currency or index.