The Nickel futures contract on the Multi Commodity Exchange (MCX) has been consolidating sideways over the last couple of weeks. The contract is stuck in a narrow range between ₹878 and ₹915 per kg over the last two weeks. It is currently trading at ₹896 per kg.

The near-term outlook is unclear. The MCX-Nickel futures contract has a significant support at ₹870 and resistance at ₹915. A breakout on either side of ₹870 or ₹915 will decide the direction of the next move. Traders can stay out of the market until a clear trend emerges.

If the MCX-Nickel futures contract declines below ₹870, it will come under renewed pressure. Such a break will keep the downtrend that has been in place since the beginning of March intact. In such a scenario, a fall to ₹850 and ₹840 is possible going forward.

On the other hand, if the contract manages to breach ₹915 decisively, it can gain fresh momentum. Such a break will ease the downside pressure. In that case, the MCX-Nickel futures contract can move higher to ₹940 and ₹950.

Global trend

The Nickel (3-month forward) contract on the London Metal Exchange (LME) has been oscillating around the psychological level of $13,000 per tonne. The contract has been range bound between $12,800 and $13,370 for almost three weeks now.

The price action and the indicators on the chart leaves the bias bullish for the contract. The 50-day moving average has crossed over the 200-day moving average. This is a bullish signal indicating that the downside could be limited.

This leaves the possibility high of the contract breaching $13,370 in the coming days. Such a break can take the contract higher to $14,000. A further decisive break will increase the likelihood of the contract targeting $16,000 over the medium term.

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

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