Commodities

MCX-Nickel in consolidation phase

Akhil Nallamuthu BL Research Bureau | Updated on October 07, 2020 Published on October 07, 2020

Bears seem to have taken a pause as the October futures contract of nickel in the Multi Commodity Exchange (MCX), which has been on a downtrend since early September, has entered a sideways trend. In other words, the contract has largely been fluctuating between ₹1,040 and ₹1,080 for the last couple of weeks.

This indicates that the bears are losing momentum and further consolidation will increase the likelihood of a bullish reversal.

But the daily relative strength index, though showing a fresh uptick, lies below the midpoint level of 50 and the moving average convergence-divergence indicator is hovering in the bearish territory. Hence, the contract should breach the resistance at ₹1,080 in order to turn the outlook in its favour.

Immediately above ₹1,080, the contract can face a hurdle at ₹1,100. But a breakout will most likely take the price beyond that level. Subsequent resistance is at ₹1,135.

Since there are indications of a recovery, traders can go long in the contract with a stop-loss at ₹1,040 if it breaks out of the resistance at ₹1,080.

Note: The recommendations are based on technical analysis.

There is a risk of loss in trading

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Published on October 07, 2020
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