Near-term view negative for MCX-Nickel

The Nickel futures contract on the Multi Commodity Exchange (MCX) has reversed sharply lower after surging initially in the past week. The contract, which made a high of ₹786 per kg on Monday, has reversed sharply lower from there.

The contract fell 2.8 per cent on Tuesday to make a low of ₹763.2 per kg. It has bounced higher from this low and is currently trading at ₹767. However, with resistance at ₹775, the immediate outlook is negative. Inability to break above ₹775 can keep the contract under pressure in the near-term.

A fall to ₹755 or ₹750 is likely as long as the contract trades below ₹775. Whether the contract reverses higher again from ₹750 or not will decide the next leg of move.

A fall below ₹750 will increase the likelihood of the contract extending its downmove to ₹735 or even lower. On the other hand, if the MCX-Nickel futures contract manages to reverse higher from ₹750, the downside pressure may ease.

In such a scenario, a rise to revisit ₹780 and ₹785 is possible. A strong break above ₹785 will enhance the possibility of the contract targeting ₹800 or even ₹815 over the medium-term.

Traders with a short-term perspective can wait for dips and go long if the contract reverses higher from ₹750. Stop-loss can be placed at ₹735 for the target of ₹780.

Revise the stop-loss higher to ₹755 as soon as the contract moves up to ₹763.

Note: The recommendations are based on technical analysis and 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


 Getting recommendations just for you...
This article is closed for comments.
Please Email the Editor