The Nickel futures contract on the MCX recorded high at ₹969 per kg last week and began to decline. It had fallen 2.25 per cent last week. The contract tests support at ₹900 per kg. It has fallen about 1 per cent on Wednesday and trades at ₹901 levels. The 200-day moving average is poised at ₹895 and it could also act as a base in the near-term.

The medium-term uptrend that commenced from ₹735 in this January appears to have come to an end at ₹969. The contract is now in a corrective fall. A strong plunge below ₹895-900 band will strengthen the corrective fall and drag the contract down to ₹880 and then to ₹860 in the short-term. The indicators in the daily chart are showing mixed cues.

The contract has key resistance in the band between ₹950 and ₹960. A strong rally above this band is needed to underpin the medium-term uptrend and take the contract higher to ₹985 and ₹1,000 in the medium-term. On the downside, failure to find support at ₹860 can drag the contract further down to ₹840 and then to ₹825 over the medium-term.

Traders with a short-term view can initiate fresh short positions on a decisive fall below ₹895 with a stop-loss placed at ₹905. Short-term targets are ₹880 and ₹860.

Global trend

The Nickel (three-month forward) contract on the London Metal Exchange is also in a corrective decline over last one week. It currently tests support at $13,000 per tonne. An emphatic fall below this base can pull the contract down to $12,800 and then to $12,500 in the short-term. On the upside, a strong rally above $13,500 can reinforce the bullish momentum and take the contract higher to $13,600 and $13,700 levels.

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