Bears in NorNickel stock may try to pass 22,600 rubles today
On Monday, Nornickel shares continued to consolidate above 22,600 rubles. In the first hour of trading, the support was broken, but it failed to consolidate lower. The securities spent the rest of the day in a low-low volatility sideways position.
On the short-term horizon, the technical picture remains neutral. Decreased trading activity is not helping to break out of the sideways pattern. The external background is moderately negative this morning, with key metal prices declining. With the support of worsening conjuncture bears may try to pass 22,600 rubles. If the level fails to hold, the next support could be found at 22,300 rubles.
The medium-term picture is also predominantly neutral. Until the breakdown of the 200-period moving average on the daily timeframe and going below RUB 22,000, there is a higher probability of a bounce. Stochastic on the daily interval is oversold, which near good supports may strengthen the activity of buyers.
Resistances: 23000 / 23200 / 23800
Supports: 22600 / 23300 / 22000
The external background this morning is moderately negative. American indices after closing our main session on Monday remained at approximately the same levels. Asian markets are trading mixed today and show no unified dynamics. The futures are down 0.1%, down 1% and near the $64 level. All this gives the grounds to assume that if the external background remains, the opening will pass near the previous day's close or a little bit lower.
Since 2009, Nornickel shares have been in a big up-trend. Growth impulses alternate with periods of sideways consolidation, and drawdowns are redeemed rather quickly, indicating the strength of the trend.
The trend indicators on the weekly timeframe are now looking up. But the pullback that began on the weekly chart overlaps the previous growth wave - a negative pattern.
The diagonal trend support, located near 24,300 rubles, was broken downward. A drop below this level could push back the scenario of renewal of historical highs. Within the framework of the current correction, the first target - 23,000 rubles. - has been worked off, the quotations found support in the zone of the previous local tops - about 22,000 rubles.
The first estimates of the accident consequences, presented by the company on March 16, resulted in the quotations' fall by more than 5%. Nevertheless, the announced plans gave an idea of the volume of production reduction, and the negative was largely already embedded in the dynamics of the securities. As the stock digests the initial reaction to the news, as well as actions to restore operations at the mines, NorNickel shares may begin to rebound.