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The nickel futures contract on the Multi Commodity Exchange (MCX) broke the ₹985-₹1,025 per kg range on the upside as expected last week. The contract has surged over 4 per cent in the past week. It is trading at ₹1,054 per kg.
The bullish outlook remains intact. The strong rally in the past week has strengthened the short-term uptrend that has been in place since May. Support at ₹1,030 is likely to limit the downside in the near term. A rally to ₹1,100 is likely in the coming days. Inability to break above ₹1,100 and a subsequent pull-back from those levels can trigger a corrective fall to ₹1,050 or ₹1,030. But if the MCX-Nickel futures contract manages to breach ₹1,100, the current rally can extend up to ₹1,125 or ₹1,150 in the coming weeks.
The near-term view will turn negative only if the contract breaks below ₹1,030. Such a break can take the contract lower to ₹1,020. Further, break below ₹1,020 will see the downmove extending to ₹1,000 thereafter.
Trading strategy
Medium-term perspective traders who have taken long positions last week at ₹993 can hold it with a revised stop-loss at ₹1,015. Move the stop-loss higher to ₹1,055 as soon as the contract moves up to ₹1,070. Book profits at ₹1,080.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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