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On the back of the support of ₹1,145, the November futures contract of nickel on Multi Commodity Exchange (MCX) rebounded last week. At ₹1,145, the 21-day moving average (DMA) coincides, making it a strong base for the contract. That is, the trend will be inclined to upwards until the price remains above this level.
The daily price action shows that the contract is likely to progress further northwards and break out of the key barrier of ₹1,200.
The breakout can intensify the rally. Substantiating the positive bias, the daily relative index is pointing upwards and stays above the midpoint level of 50. The moving average convergence divergence indicator on the daily chart, which remained flat in the past two week, is showing signs of fresh upward momentum. Moreover, the 21-DMA has crossed over the 50-DMA, a bullish indication.
Considering the above factors, the contract is highly likely to rally past ₹1,200-mark and advance towards ₹1,254. Above that level, ₹1,282 can be the resistance. Hence, traders can buy the contract on declines with stop-loss at ₹1,140.
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