Following a sharp fall in the previous week, the Nickel futures contract on the Multi Commodity Exchange (MCX) found support in the band between ₹740 and ₹750 a kg.
The contract started to move higher this week, in the first two trading sessions, and the contract has advanced 2 per cent.
On Wednesday’s trading session, the contract traded flat at around ₹766. The corrective rally can extend in the upcoming trading sessions and take the contract higher to ₹780 in the near-term.
Further rally beyond this key resistance can push the contract northwards to ₹800 in the short-term. Strong breakthrough of ₹800 is required to alter the short-term downtrend and pave way for an up move to ₹820 and ₹840 levels.
Traders with a short-term perspective should trend with caution in the near-term. Inability to move beyond ₹780 can bring back selling pressure and pull the contract down to re-test the immediate support in the band between ₹740 and ₹750.
That said, an emphatic downward break of this support band can reinforce the downtrend and drag the contract down to ₹720 and ₹700 in the short-term.
Medium-term view: Since taking support at ₹558 in June, the contract has been in a medium-term uptrend, forming higher peaks and troughs.
On November 1, the contract breached a key resistance at ₹780. However, it encountered resistance at ₹840 and started to decline.
Witnessing a corrective decline, the contract found a key long-term support in the band between ₹740 and ₹750 last week. Only a conclusive plunge below the next key support level of ₹700 will alter the medium-term uptrend and pull the contract down to ₹685 and ₹670 levels.
On the other hand, a strong upward break of significant resistance level of ₹800 can accelerate the contract higher to ₹840 and ₹850 levels.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.