The Nickel futures contract on the Multi Commodity Exchange (MCX) has failed to sustain its bounce back move witnessed in the past week. The contract made a low of ₹587.2 per kg on April 27 and had bounced higher from there. But this bounce back move was short lived and the contract has reversed sharply lower after making a high of ₹619 per kg on Monday. It has tumbled about 3 per cent from this high and is currently trading at around ₹601. Immediate support is at ₹598. If the contract manages to sustain above this support, it can bounce to ₹615 and ₹620 levels once again. The 21-day moving average and a trend-line support at ₹624 is a crucial support to watch. The downside pressure will ease if the contract manages to surpass this hurdle. In such a scenario the contract can extend its upmove to ₹635 or even ₹640 levels. On the other hand, if the MCX-Nickel futures contract fails to reverse higher from the immediate support at ₹598 then it can remain under pressure and fall to ₹590 levels once again. This will also keep the contract under pressure for a further fall. The downtrend that has been in place since March will remain intact in such a scenario and there will be a strong likelihood of the contract falling to ₹570 or even to ₹550 levels in the coming weeks.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading

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