The uptrend in the Nickel futures contract on the Multi Commodity Exchange (MCX) has gained momentum over the past week. After consolidating in a sideways range between ₹645 and ₹665 a kg for about a week, the contract has risen sharply, breaking above ₹665 on Tuesday. The contract has surged 4.7 in the past week and is currently trading at ₹690.
The uptrend that has been in place since June is intact. Support is in the band between ₹675 and ₹672. Intermediate dips to this support zone may find fresh buyers coming into the market. A test of the psychological resistance at ₹700 is likely in the near term. A strong break above this hurdle can take the contract higher to ₹715 and ₹720.
Short-term traders can make use of dips to go long at ₹680. A stop-loss can be placed at ₹665 for the target of ₹710. Revise the stop-loss to ₹690 as soon as the contract rises to ₹700. The aforementioned rally will be negated if the MCX-Nickel futures contract declines below ₹670.
Such a break can take the contract lower to ₹655 or ₹650. However, the outlook will turn negative only if the contract declines below ₹650. Such a sharp fall looks unlikely at the moment.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading
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