Technical Analysis

MCX-Nickel continues its upward trend

Yoganand D BL Research Bureau | Updated on February 20, 2019 Published on February 20, 2019

The Nickel futures contract on the MCX has been on a medium-term uptrend since taking support at ₹735 per kg in early January. However, the contract encountered a key resistance at ₹956 in early February. After two weeks of corrective fall, the contract found support at ₹856 last week and bounced up strongly.

Forming a bullish engulfing candlestick pattern at the key support level of ₹860, the contract resumed its medium-term uptrend. Moreover, the 21-day moving average also cushioned the contract.

On Wednesday, the contract gained 1 per cent breaching a key resistance at ₹900 as well as the 200-day moving average line and trades at ₹908 per kg. With this rally the corrective fall appears to have come to an end. Besides, a decisive rally above the key level of ₹900 strengthens the medium-term uptrend.

The contract can continue to trend upwards and test resistances at ₹922 and then at ₹950 in the ensuing weeks. An emphatic break above the significant medium-term resistance level of ₹950 will reinforce the bullish momentum and accelerate the contract northwards to ₹970 and ₹1,000 in the medium-term. On the other hand, key supports are placed at ₹860 and ₹840. Only a decisive break below ₹840 will increase the likelihood of the contract declining to ₹810 and ₹800 levels over the medium-term.

Traders with a high-risk appetite can make use of declines to go long with a fixed stop-loss at ₹880 levels. Targets are ₹922 and ₹950 levels.

Global trend

The Nickel (three-month forward) contract on the LME took support at around $12,080 and has bounced up recently. The contract faces key resistance ahead at $12,800 and $13,000. A conclusive break above these barriers will strengthen the up-move and take the contract higher to $13,350 levels. Key supports are at $12,300 and $12,000.

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

Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get





This article is closed for comments.
Please Email the Editor