The bull trend in Nickel that started in the month of June seems to be fading away as the commodity has been making lower highs since September. The previous rally of the price of November futures contract of MCX-Nickel from the support of ₹1,155 did not extend beyond the strong resistance at ₹1,209. In fact, the price consolidated for a while after reaching that level and started to moderate since the beginning of November.

The 21-DMA has crossed below the 50-DMA indicating that the near-term outlook remains weak for the commodity. Adding to that is the weakness in the daily relative strength index and the moving average convergence divergence indicator, which is in negative territory.

On the downside, the futures will have support around its previous low of ₹1,155. In case price breaks below that level, price action would confirm a lower low and the futures will most likely depreciate further. Supports are at ₹1,126 and ₹1,066. On the other hand, appreciation from current level will face a stiff resistance at ₹1,209 and at ₹1,265. But for the bulls to regain control, the contract price must close above ₹1,300 decisively.

On the global front too nickel price looks unsteady as indicated by the three month rolling forward contract in LME. Price rise was capped by resistance at $17,000 and it seems to be depreciating from that level, approaching the previous low of $16,050. If the contract breaches below the prior low, the sell-off could accelerate taking the price to $15,450. Support below that level is at $15,000.

The price of MCX-Nickel futures and LME-Nickel asserts the wobbly price action and so one can approach the commodity with a bearish bias. Hence, traders are recommended to initiate short positions on rallies with stop-loss at ₹1,270. Maintain a tight stop-loss until the contract breaks below ₹1,155.

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