MCX-Nickel retains its sideways move

Nickel futures contract on the Multi Commodity Exchange (MCX) continues to trade in a narrow sideways range. The contact has been stuck in the band between Rs 880 and Rs 914 per kg for over two weeks.

Within this range, the contract fell to a low of Rs 886.6 on Monday and has bounced higher from there. It is currently trading at Rs 910.

The near-term outlook continues to remain mixed. The contract is likely to test Rs 914 in the coming sessions. Inability to breach Rs 914 will keep the sideways range intact and will drag the contract lower to Rs 900 and Rs 890 levels again.

A breakout on either side of Rs 880 or Rs 914 will only decide the next move. Traders can stay out of the market until a clear trend emerges.

If the contract manages to breach Rs 914 decisively in the coming days, it can rally to Rs 927 or Rs 930 immediately. A pull back from Rs 927 or Rs 930 can drag it to Rs 910 and Rs 900 levels.

But a strong break above Rs 930 will boost the momentum and will increase the likelihood of the rally extending to Rs 950 and Rs 960 over the short term.

On the other hand, if the MCX-Nickel futures contract declines below Rs 880, it can fall to Rs 870 or Rs 863 over the short term.

An upward reversal from Rs 870 to Rs 863 can trigger a relief rally to Rs 900. But a strong break below Rs 863 will increase the downside pressure. Such a break is likely to bring fresh sellers into the market. It will then increase the likelihood of the contract tumbling to Rs 830 and Rs 800.

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

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