MCX Nickel continues to be range-bound

Traders with medium term view can hold long positions with stop-loss at ₹925

The nickel futures contract on the Multi Commodity Exchange (MCX) has been in a sideways consolidation phase since early July, between ₹910 and ₹970. After gaining 2 per cent on Tuesday, the contract witnessed selling interest and fell on Wednesday.

However, the contract has regained some ground and currently trades at ₹946/kg. Since facing a key resistance at ₹1,060 in early June, the contract has been on a medium-term downtrend. Within this downtrend, the contract is in a sideways movement.

We reiterate that a decisive break above the key resistance level of ₹970 can push the contract higher to the next resistance at ₹1,000. Traders with a medium-term view can continue to hold their long positions with a revised stop-loss at ₹925 and accumulate on a strong rally above ₹970. Medium-term targets are ₹1,000 and ₹1,025. Revise the stop-loss higher to ₹960 as the contract moves higher to ₹1,000 levels.

Subsequent resistances are at ₹1,025 and ₹1,050. Inability to move beyond ₹970 will keep the contract in sideways movement. Conversely, a conclusive fall below the lower boundary at ₹910 will strengthen the downtrend and pull the contract down to ₹890 levels. A plunge below this support can drag the contract lower to ₹865 and ₹850 levels.

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

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