The Nickel futures contract on the Multi Commodity Exchange (MCX) has extended its rally for the second consecutive week. The contract surged 4.5 per cent to make a high of ₹719.8a kg on Tuesday. But, it has slightly come-off from this high and is currently trading at around ₹714.5 , up 3.7 per cent for the week. The strong bounce-back move in the last week has taken the contract well above the psychological resistance level of ₹700. This confirms that the corrective fall has ended and the contract has resumed its overall uptrend that had begun in June. The 21-week moving average has crossed over the 100-week moving average backing the uptrend.

The region between ₹705 and ₹700 is a key support for the contract which can limit the downside. Dips to this support zone may find fresh buyers coming into the market. Resistance is in the range between ₹720 and ₹722. A strong break above ₹722 can take the contract higher to ₹750 or ₹755 in the short term.

Traders who have taken long positions last week at ₹695 can hold it with a revised stop-loss at ₹703 and for the same target of ₹720. Traders with a short-term perspective can buy on dips at ₹709 and ₹706. Keep the stop-loss at ₹695 for the target of ₹735. Revise the stop-loss higher to ₹710 as soon as the contract moves up to ₹718.

The outlook will turn negative only if the contract breaks below ₹700. The next targets are ₹690 and ₹685.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading

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