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The October futures contract of nickel in the Multi Commodity Exchange (MCX) has been on a downtrend for the last one month. But it seems to have found support at ₹1,050 as it has been trading just above that level for the past few trading sessions.
The trend is bearish as the contract has been forming lower lows, and the indicators are hinting at the same. The daily relative strength index is pointing downward and lies below the midpoint level of 50. Similarly, the moving average convergence-divergence indicator in the daily chart is tracing a downward trajectory and has entered the bearish zone.
If the price breaks below the support of ₹1,050, the sell-off could intensify and the price could drop to ₹1,000 — a psychological level. Subsequent support can be spotted at ₹970. On the upside, the contract has a resistance at ₹1,100. The 21- and 50-day moving averages coincide at ₹1,100, making it a strong hurdle.
Since ₹1,050 is a support, traders can short MCX-Nickel with stop-loss at ₹1,100 if the price breaks below ₹1,050.
Note: The recommendations are based on technical analysis.
There is a risk of loss in trading
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