The nickel futures contract on the Multi Commodity Exchange (MCX) witnessed a sharp rally breaking above the key resistance level of ₹767 per kg in the past week. But the upmove was short lived.

The contract made a high of ₹779/kg on Friday and has come-off from there. It is currently trading at ₹763. Immediate support is at ₹758 which is likely to be tested in the near-term. If the contract manages to reverse higher from there, it will be positive for it.

In such a scenario, the contract can move up to ₹780 and ₹785 again. The level of ₹785 is a key short-term resistance. A strong break and a decisive close above it will boost the momentum.

Such a break will increase the likelihood of the contract rallying to ₹810 and ₹815 levels. On the other hand, if the contract breaks below ₹758 in the coming sessions, it can fall to ₹742 or ₹740. The presence of a trend line as well as the 100-day moving average between ₹742 and ₹740 makes this region a strong support.

This leaves the possibility less of the contract falling further below ₹740.

Traders with a medium-term perspective can go long at current levels. Accumulate on dips at ₹759 and also at ₹745 if the contract declines breaking below ₹758.

Stop-loss can be placed at ₹737 for the target of ₹810. Revise the stop-loss higher to ₹770 as soon as the contract moves up to ₹780.

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

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