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The November futures contract of nickel on Multi Commodity Exchange (MCX), which was in an uptrend since early October, witnessed a minor corrective decline last week after registering a high of ₹1,187. The price dropped only to find support at ₹1,150 levels. On the back of this support, the contract resumed its upward movement on Monday.
On Wednesday, the contract rallied past the prior peak of ₹1,187 and made a fresh high of ₹1,207.9 and is hovering around ₹1,200. The bulls, attempting to take the contract past ₹1,200-mark, are likely to succeed as the overall trend is in their favour.
Corroborating the positive bias, the daily relative strength index has been moving up and stays above the mid-point level of 50. The moving average convergence divergence indicator, too, shows bullish signs as it has been tracing an upward trajectory.
Given the above factors, the contract is likely to rally to ₹1,230. If the momentum sustains, the price could move higher and touch ₹1,255. Hence, traders can initiate fresh long positions in declines with stop-loss at ₹1,160.
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