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The July futures contract of nickel on Multi Commodity Exchange (MCX) has been in a short-term uptrend since it took support at ₹950 in mid-June this year. While trending upwards, the contract had breached the significant resistance at ₹1,000 in the past week and continued to trend upwards. However, the contract recorded an intra-week high ₹1,036 on this Monday and began to move sideways. This could be a minor pause in the uptrend. The contract currently trades at ₹1025 levels. The Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) indicators are broadly charting higher in-line with the contract price. Besides, the daily price rate of change indicator features in the positive terrain implying buying interest. Also, the commodity price hovers well above both the 21- and 50-day moving averages, signifying bullish momentum.
In the recent times, the contract had decisively breached the key resistance level of ₹1,000 which had subsequently turned to vital base and provided base. Any correction in the near term can take support at this base. A conclusive break above the immediate resistance level of ₹1,035 can take the contract northwards to ₹1,050 and above this level it could trend to ₹1,100 levels over the short term.
Conversely, if the contract slumps below ₹1,000 bears might come back and regain control. Therefore, traders should tread with caution in the scenario and desist taking fresh long positions. Next key supports are at ₹980 and ₹950.
On the global front, the price of three-month rolling forward contract of nickel on London Metal Exchange (LME), breached the resistance at $13,000 recently and extended the uptrend. It is currently hovering at $13,518. Immediate resistances are at $13,750 and $14,000. Supports at pegged at $13,250 and $13,000.
The contracts on MCX as well as LME are trending upwards. Short-term outlook is bullish and the contract pas potential to extend the uptrend. Hence, traders can buy the MCX-Nickel on declines with stop-loss at ₹995.
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