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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
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