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After breaking above ₹800/kg last week on November 1, the nickel futures contract has been trading in a sideways range. The contract hit a high of ₹841.9 on the same day and come-off from there. It is currently trading at ₹817/kg. A range-bound move between ₹800 and ₹840 is possible for some time. A breakout on either side of ₹800 or ₹840 will then determine the next move for the contract.
On the charts, the bias is bullish. Strong support is seen around ₹800. This leaves the high possibility of the contract sustaining above ₹800 and breaching ₹840 decisively in the coming weeks. Such a break can take the contract higher to ₹860 initially. Further break above ₹860 will then pave the way for the next target of ₹900.
On the other hand, if the contract breaks below ₹800, it can fall to ₹780. The region around ₹780 is a strong medium-term support. Further fall below ₹780 is unlikely. An upward reversal from ₹780 can then take the contract higher to ₹800 and ₹840 levels again.
Traders with a medium-term perspective can go long on dips at ₹810 and then at ₹790 if the contract falls below ₹800. Stop-loss can be set at ₹770 for the target of ₹880. Revise the stop-loss higher to ₹730 as soon as the contract moves up to ₹745.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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