The Nickel futures contract on the Multi Commodity Exchange (MCX) encountered a key resistance in the band between ₹780 and ₹800 per kg in early September and late October this year.

The November month futures contract has gained 5 per cent to record an intra-day high of ₹841 on Wednesday. However, witnessing selling pressure at higher levels, the contract slipped from the intra-day giving away its intra-day gains. It currently trades at ₹813 per kg, gaining 13 or 1.7 per cent.

This rally has marginally breached the key resistance level and strengthened the short-term uptrend that has been in place since late September low of ₹665. The daily relative strength index has re-entered in the bullish zone from the neutral region. The medium-term trend is also up for the contract. It can continue to trend upwards and test resistances at ₹850 and ₹900 in the medium term.

Traders with a medium-term perspective can buy the contract in dips with a fixed stop-loss at ₹775 levels. In the short-term the contact can experience a corrective decline and find supports at ₹800 or ₹780 levels. Next key support is pegged at ₹750. An emphatic fall below this level will mar the short-term uptrend and pull the contract down to ₹730 and ₹710 levels.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading

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