The Nickel futures contract on the Multi Commodity Exchange (MCX) rose in the past week to test the psychological level of ₹700 a kg, as expected.
The contract touched a high of ₹703 on August 10 and had reversed sharply lower from there. However, the 200-day moving average support at ₹664 halted this pull-back.
The contract fell to a low of ₹664.4 on Monday and has reversed higher again. It is currently trading at ₹680.
The 200- and 21-day moving averages at ₹664 and ₹650 respectively are the key supports for the contract which are likely to arrest the downside in the short term. A revisit of ₹700 looks likely in the coming days.
A strong break above ₹700 will increase the possibility of the contract extending its rally to ₹715 or ₹720 thereafter.
Traders with a medium-term perspective can make use of dips to go long at ₹665. A stop-loss can be placed at ₹640 for the target of ₹710. Revise the stop-loss higher to ₹670 as soon as the contract moves up to ₹680.
The contract will come under pressure only if it declines below the 21-day moving average support level of ₹650. Such a break will increase the possibility of the contract falling to ₹640 and ₹630 levels.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading
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