The Nickel futures contract on the Multi Commodity Exchange (MCX) inched higher in the past week as expected. However, the upmove was short-lived as the contract faced resistance at around ₹843 per kg. It made a high of ₹843.7 on Monday and has come-off from there. It currently trades at ₹829.

The 100-day moving average resistance at ₹841 has halted the current upmove. Though the near-term outlook is mixed, the broader view remains positive. Key support is in the ₹810-₹800 region.

bl24MWCommCalG975AFV5E1jpgjpg
 

 

The indicators on the charts are also positive. The 21-day moving average is on the verge of crossing over the 55-day moving average. This is a positive signal indicating that the downside could be limited. This leaves the possibility less of the contract breaking below ₹800. As such an eventual break above the ₹840-₹845 region can trigger a fresh rally to ₹865 and ₹870.

Trading strategy

Risk appetite traders who have taken long positions at ₹825 and ₹815 can hold it. Retain the stop-loss at ₹795 for the target of ₹870. Revise the stop-loss lower to ₹835 as soon as the contract moves up to ₹855.

Global trend

The nickel (3-month forward) contract on the London Metal Exchange (LME) has come-off after making a high of $11,885 per tonne on Monday. It is currently trading at $11,585. Immediate resistance is at $11,770. As long as the contract trades below it, there is a strong likelihood of it falling towards $11,150 and $11,000 in the coming days. The level of $11,000 is a strong support and a break below it looks less probable. If the LME-Nickel contract breaks below this support, a fall to $10,700 is possible.

A strong rise past $12,000 is needed for the contract to gain fresh momentum. Such a break will then increase the likelihood of the contract targeting $12,350.

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

Related Topics
comment COMMENT NOW