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The April futures contract of nickel on the Multi Commodity Exchange (MCX), which was fluctuating in a tight price range in March post a deep correction, broke out of the consolidation range last week. The futures contract seems to be realigning with a major uptrend and the likelihood of a rally looks high.
After bottoming out at ₹850 levels in March 2020, the contract established a bullish trend and formed higher highs and higher lows thereby forming a steady rally.
However, in the final week of February this year it witnessed an abrupt change in the direction of the trend after hitting a high of ₹1,461. Subsequently, the price dropped quickly where it marked a low of ₹1,154 in early March.
The contract is currently trading around ₹1,270 levels. Since the major trend is bullish, the recent breakout is likely to lift the price further.
Traders can buy nickel futures on dips with stop-loss at ₹1,200 for a potential target of ₹1,360.
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