The supports in the ₹775-785 per kg region have held well for the Nickel futures contract on the Multi Commodity Exchange (MCX), as anticipated.

The contract fell to a low of ₹782.6/kg on Monday and has surged 4.8 per cent to ₹820.

The sharp rally in the past week has taken the contract well above the key resistance level of ₹816.

This level may now serve as a good support for the contract.

Also, cluster of supports present in the band between ₹810 and ₹785 can limit the downside if the contract declines below ₹816 in the short-term.

The 21-day moving average has crossed over the 55-day moving average and it strengthens the bullish bias.

This indicates that the downside in the contract could be limited in the coming days.

A rally to ₹840 or ₹845 is likely in the short term. Inability to break above ₹845 can trigger an intermediate pull-back move to ₹820.

But an eventual break above ₹845 will pave the way for the next target of ₹865 over the medium term.

Traders with a high-risk appetite and medium-term perspective can make use of dips to go long near ₹816 and can also accumulate at ₹806 and ₹790. Stop-loss can be placed at ₹780 for a target of ₹860.

If the contract fails to sustain above ₹816 in the coming days and reverses lower, it can fall to ₹800 levels again.

In such a scenario, a range-bound move between ₹785 and ₹720 can be seen for some time.

However, within this range, the bias will continue to remain bullish.

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

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