The continuous contract of nickel on the Multi Commodity Exchange (MCX), which began the year at around ₹1,215/kg, rallied during the initial weeks and reached ₹1,440 levels towards the end of February.

But the contract started to decline and by the first week of March, it had dropped to ₹1,150 levels, thereby losing about 20 per cent within a couple of weeks.

Following this, the futures saw a brief period of consolidation and then began to appreciate.

Since the final week of May, the contract has been steadily gaining with intermittent corrections and notably, the 50-day moving average (DMA) consistently provided support.

The upward progression has been continuing and before a couple of weeks, it hit a fresh high of ₹1,554.7.

However, the contract fell from those levels to mark a low of ₹1,411 last week.

Although the price has corrected, it is trading around the 50-DMA.

While it briefly went below this level, it swiftly recovered and is now hovering around ₹1,450.

Also, the price band between ₹1,380 and ₹1,400 is a considerable support band and until this band holds, the trend will be bullish.

The price action over the past six months too suggests that the chances of a bounce from the current levels is high.

Traders can buy nickel futures on declines with stop-loss at ₹1,400 and look for a target of ₹1,550.

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