The Nickel futures contract on the Multi Commodity Exchange (MCX) has risen in the past week as expected, breaking above the key resistance level of ₹873 per kg. The contract surged about 9 per cent intra-week and hit a high of ₹951.3 on Tuesday. Though the contract fell from the high, it has reversed higher again from around ₹921 and is currently trading at ₹949 per kg.

A key resistance is near ₹956. Inability to breach this hurdle can drag the contract lower to ₹920 again. A break below ₹920 will then increase the likelihood of the contract extending its downmove towards ₹900 thereafter. A rangebound move between ₹900 and ₹956 can be seen for some time in such a scenario.

On the other hand, if the MCX-Nickel futures contract manages to breach above ₹956 decisively, the current uptrend can extend towards ₹1,000 in the coming weeks.

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Since the contract has risen sharply in a short span of time, the possibility remains high of the resistance at ₹956 capping the upside in the coming days. As such, the MCX-Nickel futures can trade subdued and remain rangebound for some time before the current uptrend resumes.

Global trend

The uptrend in the Nickel (3-month forward) contract on the London Metal Exchange (LME) made a high of $13,275 per tonne in the past week and has come-off slightly from there. It is currently trading at $13,275 per tonne.

The key resistance level of $13,285 is holding well as of now. As long as the contract trades below this hurdle, a test of the next support at $12,850 is possible in the near term. A break below $12,850 will then increase the likelihood of the contract extending its corrective fall towards $12,500.

A strong break and a decisive close above $13,285 is needed for the uptrend to gain fresh momentum. Th next target if $13,800.

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

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