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The Nickel futures contract on the Multi Commodity Exchange (MCX) has surged breaking above the psychological level of ₹600 per kg in the past week. The contract has risen over 5 per cent in the past week. It is currently trading at ₹625 per kg. Support for the contract is at ₹613, which is holding well as of now.
The current upmove can extend to ₹635 and ₹640 in the coming days. Inability to break above ₹640 and a subsequent downward reversal from there can take the contract lower to ₹620 or even ₹615. But if the MCX-Nickel futures contract manages to break above ₹640 decisively it can rally to ₹657 — the 38.2 per cent Fibonacci retracement resistance level.
Short-term traders with a high-risk appetite can go long on dips at ₹615. Stop-loss can be placed at ₹605 for the target of ₹645. Revise the stop-loss higher to ₹620 as soon as the contract moves up to ₹625.
The near-term outlook will turn negative only if the contract declines below ₹613 decisively. Such a break can drag the contract lower to ₹600. A further break below ₹600 may increase the possibility of the contract declining to ₹590.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading
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