Commodity Calls

MCX Nickel in sideways range with a positive bias

Gurumurthy K BL Research Bureau | Updated on January 10, 2018 Published on September 27, 2017


The downtrend in the Nickel futures contract on the Multi Commodity Exchange (MCX) ended in the past week and the contract has been consolidating in a sideways range over the last few days.

The downtrend that has been in place since the beginning of this month, from the high of ₹786 per kg, halted at a low of ₹674.2 last Friday. Since then, the contract has been moving in a sideways range between ₹674 and ₹693. If the contract manages to break above ₹693, it can move up to ₹700 in the near term.

Only a decisive break above ₹700 will reduce the downside pressure and turn the outlook positive.

In such a scenario, a rally to ₹720 or ₹730 is possible. But, as long as the MCX Nickel futures contract trades below ₹700, the downtrend will remain intact. It will keep the possibility alive of the contract breaking below ₹674. Such a break can drag the contract lower to ₹660 or ₹658.

Strong support level

The region between ₹660 and ₹658 is a strong support region. Both a trend-line as well as the 200-day moving average are poised in this region.

An immediate break below this support zone is unlikely. Also, the 21-week moving average is on the verge of crossing over the 100-week moving average, a positive signal indicating that the downside could be limited. These indicators leave the possibility high of the contract reversing higher from the ₹660-₹658 support zone.

Such a reversal may have the potential to take the contract higher to ₹700 and ₹750 over the medium term.

Those with a medium-term view can go long on dips to ₹660. A stop-loss can be kept at ₹640 for the target of ₹720.

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

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Published on September 27, 2017
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