Commodity Calls

MCX-Nickel consolidates with a negative bias

Gurumurthy K | Updated on January 12, 2018 Published on June 07, 2017

The downtrend in the Nickel futures contract on the Multi Commodity Exchange (MCX) paused in the past week. The contract was stuck in a sideways range between ₹563 and ₹581 a kg. Within this range the contract is trading slightly below the upper end of the range, at ₹575 per kg.

The bias within the range remains bearish and the overall downtrend is expected to remain intact. A cluster of resistances at around ₹580 may make it difficult for the contract to break above this hurdle.

As such, a break below ₹563 can bring fresh selling pressure. Such a break can drag the contract lower to ₹550 initially. A further break below ₹550 will increase the likelihood of the contract, extending its fall to ₹535. The level of ₹535 is a significant long-term trend support, which can halt the current downtrend.

Short-term traders with a big risk appetite can make use of a rise to ₹580 to go short. A stop-loss can be placed at ₹593 for the target of ₹555. Revise the stop-loss lower to ₹575 as soon as the contract moves down to ₹568.

On the other hand, if the MCX-Nickel futures contract manages to breach ₹581 decisively, it can rise to ₹587 or ₹592 in the coming days. A further break above ₹592 will pave way for the next targets of ₹600 and ₹610.

Published on June 07, 2017
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