Base metals complex gained some ground on the expectations of fresh buying following better than expected U. S. Consumer Confidence Index data.

MCX Nickel witnessed a sharp rise of more than 5%, ending the day at Rs. 637.1. Copper and lead were up by 2.41% and 1.41% in the last trading session on MCX.

China's State Reserves Bureau (SRB) has quietly sold off over the past month a small volume of its contracted copper imports and might sell up to 50,000 tonnes, temporarily reversing course after months of buying.

Indicating demand may be tailing off, cancelled warrants of copper fell to 47,625 tonnes from 52,875 tonnes on May 21. Cancelled warrants, which is material earmarked for delivery, indicate physical demand.

U. S. consumer confidence soared in May to its highest level in eight months as the strain on the labour market showed some signs of easing, boosting investors hopes of a bottoming for the U. S. economy.

Base metals: Base metals complex is expected to see some upside and is the flavour for the day. We expect some fresh buying in base metals on the back of better than expected data. Though a rise in rupee following the funds inflow may cap the upside in prices. We recommend buying in Nickel and Zinc at dips during the day.

Copper: Copper prices shot-up yesterday above 221 levels, however took resistance at the earlier resistance level at 225. Thus new buying in copper can be done only above 225 levels, targeting 228 and 230. On downside copper can to come to 221 levels on profit Booking.

Zinc: Zinc prices did not join the upwards rally yesterday, however maintained above 70.5 levels. Zinc prices moved positive yesterday, but went down during the close forming a DOJI. Thus prices maintaining above 70.5 keeps the bias on the upside for the day.

Lead: Lead prices moved up slighted yesterday, and the RSI also is seen with a Up-side cross over with MA. Thus the bias emains on the upside for the day. Next resistance in Lead can come in at 70 levels for the day.

Nickel: Nickel prices have shouted up sharply to 640 levels from 600 levels yesterday. Profit Booking can come in at current levels pushing Nickel to 622-25 levels. However, Nickel prices are positive above 622 levels.

The ADX and RSI, both have given cross over on the upside yesterday. Thus one can remain long in Nickel at lower levels above
622. Next upside in Nickel can be 655 and 662 for the day.