The futures contract of nickel on the Multi Commodity Exchange (MCX) has been on a steady uptrend since its March 2020 lows, when it registered a low of ₹805.8. Apart from a price correction in September, the bulls has not really faced a meaningful threat.
Affirming that the price drop was nothing but a correction, the contract has now rallied back above an important level of ₹1,285 with substantial volume. Corroborating the same, the daily relative strength index is now back above 50, a bullish indication. Also, the moving average convergence divergence indicator on the daily chart is turning its trajectory upwards and it remains in the positive territory.
The above factors hint at more gains from the current levels. Above ₹1,300, the prior high of ₹1,333 can act as a hurdle. A breach of this level can further improve the upward momentum wherein the contract may appreciate to ₹1,368 and then possibly to ₹1,380 if momentum does not fade. Key support levels are at ₹1,285 and ₹1,245.
Traders can initiate fresh long positions on declines with stop-loss at ₹1,245.
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