September futures contract of Nickel on the Multi Commodity Exchange broke out of a tight consolidation range between ₹1,110 and ₹1,145 last Wednesday to record a new high of ₹1,314.80 a kg. Currently, there’s a pause in the trend but ₹1,262 will be considerable a support for the commodity contract. On Wednesday, the contract opened at ₹1,274.9 and moved up to the intra-day high of ₹1,284.8 before declining to the intra-day low of ₹1,270.2, which is also the previous close of the contract, making it a reasonable support.

 

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The contract will be supported by demand zone between ₹1,263 and ₹1,270, and until the price remains above this range, the contract will maintain a bullish bias. On the back of the existing bull trend, if the price breaks above ₹1,315, it may move up towards ₹1,367 and even to ₹1,400 levels. On the other hand, if the current trend reverses and the price breaks below ₹1,263, the contract will find support at ₹1,211 and ₹1,200 levels.

Global trend

Nickel on the London Metal Exchange has been on a strong bull trend since the beginning of July this year. The strong momentum continued, and the price went past an important psychological level of $18,000 a per tonne, to record a five-year high at $18,620. However, it has cooled off a bit reacting to a strong hurdle at $18,800 and the price has moderated to $17,950 levels.

As long as $17,850 holds, the commodity will maintain a bullish bias; but for it to make fresh highs, the important level of $18,800 must be breached. In case of a trend reversal, a break below $17,850 will drag the price to $17,000 over the medium term.

Since the current trend is bullish, traders can approach with a bullish bias and initiate long positions in MCX-Nickel September futures contract with stop loss at ₹1,260 for a short-term target of ₹1,315 and a medium-term target of ₹1,367. Rupee weakness might support MCX price even if global price of nickel moderates.

 

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