Commodity Calls

MCX-Nickel breaks below a key support

Gurumurthy K BL Research Bureau | Updated on January 15, 2018 Published on April 26, 2017

nickel

The Nickel futures contract on the Multi Commodity Exchange (MCX) fell in the past week and tested the psychological support at ₹600 a kg as expected. After hovering above ₹600 in a narrow range between ₹600 and ₹620 for a couple of days, the contract declined breaking below this psychological support on Monday.

The contract continues to sustain below ₹600 and is trading at ₹594 . Inability to bounce back above ₹600 from current levels can keep the contract under pressure. In such a scenario, there is a strong likelihood of the contract falling to ₹570 or even ₹550 in the coming days.

On the other hand, if the contract manages to rise above ₹600 in the coming days, the downside pressure may ease. A rise to ₹620 can be seen in that case.

A strong break above ₹620 will pave way for a further rally to ₹635 or ₹640 thereafter. The region between ₹635 and ₹640 is a crucial resistance zone.

The outlook for the MCX-Nickel futures contract will turn positive only if it manages to surpass this hurdle. A subsequent reversal from ₹635-₹640 will keep the broader bearish outlook intact. It will also keep alive the possibility of the contract tumbling to ₹550 or even lower levels over the medium term.

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

Published on April 26, 2017
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