The nickel futures contract on the Multi Commodity Exchange (MCX) surged in the past week breaking the ₹880-₹914 per kg sideways range on the upside. However, the contract seems to have lost momentum over the last couple of trading days. The contract made a high of ₹956.9 per kg on Friday. Since then, it has been range-bound between ₹925 and ₹959. It is currently trading at ₹942.
The near-term outlook is unclear. Key resistances are at ₹963 and ₹968. A strong break and a decisive close above ₹968 is needed to gain fresh momentum. Such a break can take the contract higher to ₹988 or ₹990. Further break above ₹990 will then increase the likelihood of the contract targeting ₹1,050 levels in the coming weeks.
On the other hand, if the MCX-Nickel futures contract fails to breach ₹968 in the coming days, it can dip to ₹915 or ₹910 in the near term. A range-bound move between ₹900 and ₹968 is possible in such a scenario. A break below ₹900 can drag the contract lower to ₹885 or ₹875.
However, the bias on the chart is bullish. There is high possibility of the contract rallying beyond ₹968 in the coming days.
Trading strategy
Traders with a medium-term perspective can go long on dips at ₹935 and ₹925. Stop-loss can be placed 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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