Nickel may gain as much as 11 percent after halting declines at a trend line, before the rally stalls at $25,000 a metric ton, according to technical analysis by Commerzbank AG. The attached chart shows the metal steadied after sliding to a 20-month trend line. The second chart shows prices may climb to $25,000, around the 2007 lows and near a 38.2 percent retracement of the 2007-2008 decline, one of the levels singled out in so-called Fibonacci analysis. “While we must allow for a rebound from here, we look for rallies to remain capped by the $25,000 resistance,” Commerzbank technical analyst Karen Jones said in a report yesterday. “This is tough resistance, and we continue to look for failure here.” Nickel for three-month delivery was at $22,440 a ton at 6:15 a.m. on the London Metal Exchange, taking this year’s gain to 21 percent. It’s the second-best performer in 2010 of the six main industrial metals traded on the LME, lagging only tin. About two-thirds of nickel production is used to make stainless steel resistant to corrosion. In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that prices tend to drop or climb by certain percentages after reaching a high or low. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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