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The nickel futures contract on the Multi Commodity Exchange (MCX) witnessed a bullish breakout of its sideways range in the past week. The contract, which was range-bound between ₹680 and ₹700 per kg, breached above ₹700 on Monday. The contract surged to a high of ₹721 on Tuesday and has come-off from there. It is currently trading at around ₹714.
If the contract manages to sustain above ₹700, it will signal that the corrective fall that was in place since the December high of ₹816.5 has ended.
As long as the contract trades above ₹700, a rise to ₹740 is likely in the near term. A break above ₹740 may take it further higher to ₹750 or even ₹760.
The bias in the chart is bullish and there is a strong likelihood of the contract sustaining above ₹700. Short-term traders with high risk appetite can go long. Accumulate long positions on dips near ₹705. Keep the stop-loss at ₹690 for the target of ₹755. Revise the stop-loss higher to ₹720 as soon as the contract moves up to ₹735.
The near-term view will turn negative only if the contract declines below ₹700. Such a break can take the MCX nickel futures contract lower to ₹680 once again. However, such a fall breaking below ₹700 looks less probable at the moment.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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