The bull trend in the August futures contract of nickel on Multi Commodity Exchange (MCX) looks intact as it bounced after a minor correction. It took support at ₹1,065 where the 21-day moving average (DMA) coincides. Going forward, it is likely to make higher highs. Notably, the contract has been rallying since the beginning of April.

The daily relative strength index is showing a fresh uptick and it lies above the midpoint level of 50. The moving average convergence divergence indicator in the daily chart, which was flat during the past week, has turned its trajectory upwards. Also, it remains in the bullish region. So, these indicators support the positive bias.

On the back of the prevailing bull trend, the contract will most likely advance to ₹1,140. Above that level, it can move up to ₹1,055. But if the contract reverses and depreciate, ₹1,100 can be the nearest support. A breach of this level can pull the contract down to ₹1,065. A break below this level can turn the outlook negative, attracting more selling interests.

On the global front, the price of three-month rolling forward contract of nickel on gthe London Metal Exchange (LME) has been in a considerable uptrend for the past five months. Extending the rally, the contract made fresh high last week and is now trading just over $14,650 and as long as the price remains above $14,000 the bulls are likely to be in control. So, the contract might witness further appreciation from the current level and this can positively influence the contract in MCX.

Trade Strategy

The contract in MCX bounced from the support of ₹1,065 last week and has been moving up. The overall trend is bullish too. Also, globally the price of the metal seems to go up further which can push up the domestic price. Given that, traders can initiate fresh long positions in declines with stop-loss at ₹1,065.

Related Topics
comment COMMENT NOW