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The Nickel futures contract on the Multi Commodity Exchange (MCX) has been trading volatile since last week. The contract made a high of ₹581.9 a kg on Monday and fell sharply from there to make a low of ₹558.6 on Tuesday. It has reversed higher again from this low and is currently trading at ₹570 . The near-term view is not clear. Immediate resistance is at ₹574. A break above it can take the contract higher to test the ₹582-₹584 resistance region. Inability to break above this resistance zone may trigger a pull-back move once again to ₹558. In such a scenario, a range bound move between ₹568 and ₹584 is possible for some time. A breakout on either side of ₹558 or ₹584 will then decide the next leg of move for the contract.
A strong break and a decisive close above ₹584 will ease the downside pressure. Such a break will pave way for a fresh rally to ₹605 or ₹610 thereafter. It will also signal a reversal of the downtrend that has been in place since April.
On the other hand, if the MCX-Nickel futures contract breaks below ₹558, it will come under more pressure. It will also keep the downtrend that has been in place since April intact. Such a break will increase the likelihood of the contract falling to ₹550 or even lower levels thereafter.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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