Commodity Calls

MCX-Nickel is stuck in a sideways range

Gurumurthy K | Updated on March 21, 2018

The Nickel futures contract on the Multi Commodity Exchange (MCX) had reversed lower in the past week, contrary to an expectation for a strong rally. The contract made a high of ₹908 per kg on March 14 and has come-off from there. It has fallen over 3 per cent from this high and is currently trading at ₹875 per kg.

Stuck in a sideways range

The MCX-Nickel futures contract has been stuck in a narrow sideways range between ₹850 and ₹908 over the last few weeks. Within this range, the contract is moving down after testing the upper end of the range. An intermediate resistance is at ₹885. As long as the contract trades below this hurdle, there is a strong likelihood of it trending down towards ₹860 and ₹850 in the coming days. An upward reversal from ₹850 will keep the sideways range intact and will take the contract higher to ₹880 and ₹900 levels again.

A breakout on either side of ₹850 or ₹908 will decide the next trend for the MCX-Nickel futures contract. A strong break below ₹850 will bring renewed downside pressure. Such a break can drag it to ₹835 or ₹830. On the other hand, if the contract manages to surpass the resistance at ₹908, it can gain fresh momentum. In such a scenario, the contract can rally to ₹930 and ₹935.

Trading strategy

Traders can stay out of the market until the range breakout gives a clear cue on the next trend.

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

Published on March 21, 2018

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like