Commodities

MCX-Nickel: Bulls should stay cautious

Akhil Nallamuthu BL Research Bureau | Updated on November 25, 2020 Published on November 25, 2020

 

The December futures contract of nickel on the Multi Commodity Exchange (MCX), which has been in an uptrend since early October, was consolidating in sideways trend within ₹1,184 and ₹1,210 for the past two weeks. But the contract broke out of the range on Tuesday, shifting the bias to upside.

The current price level is well above the 21-day moving average indicating considerable upward momentum. Notably, the latest breakout has confirmed an ascending triangle – a bullish chart pattern. Moreover, the relative strength index and the moving average convergence divergence indicators on the daily chart stay in their respective bullish territory. However, as a caution, both the indicators are showing weakness in the rally.

So, traders can initiate fresh long positions with stop-loss at ₹1,184 if the contract rallies past ₹1,220. A breakout of ₹1,220 can take the contract to ₹1,250 and interestingly, the ascending triangle pattern indicates a possibly target of ₹1,280. Immediate supports can be spotted at ₹1,184 and ₹1,140.

 

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Published on November 25, 2020
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