The 200-week moving average resistance at ₹780 per kg has continued to cap the upside in the Nickel futures contract on the Multi Commodity Exchange (MCX) for the second consecutive week.

The contract had reversed sharply higher after a low of ₹752.5 per kg on October 18. This bounce-back halted at a high of ₹782 on Tuesday and the contract has reversed lower from there. It is currently trading at ₹768 per kg.

Inability to rally above ₹780 decisively from current levels will keep the possibility of the contract falling to ₹748 in the coming days high. The level of ₹748 is a key support which is likely to limit the downside the short term. An upward reversal from ₹748 can then take the contract higher to ₹780 again.

A range-bound move in the band between ₹748 and ₹782 can be seen for some time in such a scenario.

Fresh rally possible

An eventual break and a decisive close above ₹782 will boost the momentum. Such a break will keep the uptrend that has been in place since June intact. It will then pave the way for a fresh rally to ₹850 or even higher levels over the medium-term.

Traders with a medium-term perspective can buy on dips at ₹760 and accumulate at ₹750. A stop-loss can be placed at ₹725 for the target of ₹820. Revise the stop-loss higher to ₹770 as soon as the stock moves up to ₹800.

The short-term outlook will turn negative only if the contract breaks below ₹748 decisively. The next target is ₹730.

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