This is a contrarian pick (read -high risk of losing money :),you have been warned).This pick in accordance with my policy of buying in bear markets and selling in bull markets.I use the media as an indicator for sentiment and do the exact opposite after applying common sense.
Nickel is used to produce stainless steel among other uses.Nickel reached its peak in 2006 amidst a global shortage.
Nickel shortage causes panic screams the headline-I would be selling here
http://www.abc.net.au/rural/news/content/2006/s1718328.htm
Bloomberg-nickel underinvestment,prices zooming
http://www.bloomberg.com/apps/news?pid=10000082&sid=a6jo0...
CRISIS
Fast forward to July 2008
Global growth is slowing,US is tanking,base metal demand is going to crumble,mines will shut down etc.
Global commodity bubble wobbles
http://www.lankabusinessonline.com/fullstory.php?nid=37422943...
Fox a nickel miner shuts down a mine because of excess supply
http://news.smh.com.au/business/fox-winds-down-mine-nickel-pr...
Could prices go down even further?
Not by much because the prices any less than this would make mining unviable thereby creating a floor for prices.Besides this I am bullish on China,it will continue to grow and enhance its infrastructure.When an economy slows down,governments enhance spending and China has the cash.Stainless steel demand will pick up as prices fall.
http://steelguru.com/news/index/2008/07/19/NTUzMjM%3D/Nickel_...
$32.03 (07/18/08)
