The Nickel futures contract on the Multi Commodity Exchange (MCX) made a low of ₹573 a kg and has reversed sharply higher from there. The corrective fall that was in place since the beginning of this month ended early this week. The contract has surged over 4 per cent from its recent low and is currently trading at ₹596.5 a kg. Cluster of supports are poised in the ₹590-₹580 zone. As long as the contract manages to sustain above this support zone, further rise is possible in the coming days.

Psychological resistance is at ₹600. A strong break and a decisive close above this hurdle will ease the downside pressure. It will increase the possibility of the contract rallying to ₹610 and ₹615. Inability to break above ₹615 can trigger a pull-back move to ₹600 or even lower levels. In such a scenario, the contract may remain range bound between ₹580 and ₹615 for some time. A breakout on either side of ₹580 or ₹615 will then decide the next move.

Short-term traders with a high-risk appetite can go long on dips at ₹585. Stop-loss can be placed at ₹575 for the target of ₹605. Revise the stop-loss higher to ₹588 as soon as the contract moves up to ₹595.

The contract will come under pressure again only if it declines below ₹580 decisively. Such a break will increase the likelihood of the contract falling to ₹570 or even lower levels.

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

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