The nickel futures contract on the Multi Commodity Exchange (MCX) has been trading subdued over the last one week. The contract fell to a low of ₹901.2 per kg on Monday. It has bounced from there and currently trades at ₹919 per kg.

The price action for over a week suggests that the contract lacks strong sellers to drag it decisively lower. Also, the price movement indicates that the contract is getting fresh buying interest around the psychological level of ₹900. This leaves the bias positive.

An up-move to ₹950 or ₹960 is likely in the near term. Key resistances are at ₹961 and ₹968. Inability to breach these hurdles can drag the contract lower to ₹900 levels again. In such a scenario, the contract may remain range-bound in the band between ₹900 and ₹968 for some time. However, the bias will continue to remain positive.

A break above ₹968 will boost the momentum. Such a break will take the contract higher to ₹990. A further break above ₹990 will then increase the possibility of the rally extending to ₹1,020 and ₹1,050 levels over the medium term.

The outlook will turn negative only if the MCX-Nickel futures contract breaks below ₹900. The ensuing targets are ₹885 and ₹875.

Trading strategy

Medium-term traders who have taken long positions on dips at ₹935 and ₹925 can hold it. Retain the stop-loss at ₹890 for the target of ₹1,025. Revise the stop-loss higher to ₹955 as soon as the contract moves up to ₹975.

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

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