Nickel settled down -1.38% at 894.10 as market players left for the Chinese New Year holiday, leaving weak spot prices also worries over further QE3 tapering weighted base metals prices down. Without major news, LME nickel overnight underperformed other metals, and fluctuated between USD 14,300-14,450/mt during Asian trading hours. The strong German's IFO index for January, the highest since July 2013, helped support all base metals prices, except nickel. The US new home sales dropped by 7% in December, depressing market sentiment. Market focus is still on the upcoming US FOMC meeting. The selloff in financial markets was triggered after data last week pointed to a steeper than expected slowdown in Chinese manufacturing, fuelling fears that weakness could spread to other emerging market economies. Investors were looking ahead to the outcome of the Federal Reserve's monthly meeting on Wednesday, amid expectations for a reduction in its bond buying program to USD65 billion from the current USD75 billion. The policy meeting will mark the last for outgoing Fed Chairman Ben Bernanke, as current Vice Chair Janet Yellen prepares to take over. In addition, the initial estimate of U. S. fourth quarter gross domestic product is reported on Thursday. Technically market is under long liquidation as market has witnessed drop in open interest by -8.06% to settled at 4507 while prices down -12.5 rupee, now Nickel is getting support at 888.5 and below same could see a test of 882.9 level, And resistance is now likely to be seen at 903.6, a move above could see prices testing 913.1.

Trading Ideas:

Nickel trading range for the day is 882.9-913.1.

Nickel dropped on profit booking after data showed US new home sales dropped by 7% in December, depressing market sentiment.

Investors were concerned about the effect of continued QE tapering expected after the Fed's January policy meeting.

Technically market is under long liquidation as market has witnessed drop in open interest by -8.06% to settled at 4507