Technical Analysis

Uptrend gains momentum in MCX-Nickel

Gurumurthy K BL Research Bureau | Updated on March 06, 2019 Published on March 06, 2019

The Nickel futures contract on the MCX has been on a strong surge over the last three weeks. The contract has surged about 4 per cent in the past week and is currently trading at ₹961 per kg. The strong rally in the past week has taken the contract decisively above the key resistance level of ₹955. The recent upmove keeps the overall uptrend that has been in place since the beginning of the year intact.

The level of ₹955 will now act as a good support and can limit the downside. The next supports are at ₹935 and ₹930.

The outlook is bullish. The indicators on the charts are also bullish. The 21-DMA has crossed over the 200-DMA. This is also a bullish signal indicating that downside could be limited.

The current rally can extend to ₹985 and ₹990. A further break above ₹990 will then increase the likelihood of the contract extending its upmove towards ₹1,020 and ₹1,035.

Trading strategy

Traders with a medium-term perspective can go long at current levels and also accumulate at ₹955 and ₹945. Stop-loss can be placed at ₹920 for the target of ₹1,030. Revise the stop-loss higher to ₹970 as soon as the contract moves up to ₹985.

Global trend

The Nickel (three-month forward) contract on the London Metal Exchange has risen sharply in the past week. The contract has surged 5 per cent in the past week and is currently trading at $13,650 per tonne.

The outlook is bullish. Key supports are at $13,380 and $13,270 can likely to limit the downside in the near-term. The current up-move is likely to extend in the coming days targeting $14,300 and $14,400. Inability to breach $14,400 can trigger a pullback move to $13,400 and $13,300 thereafter.

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

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