The latest run up in nickel price, which began in March this year, seems to have slowed down towards the end of October. Thus, the December futures of nickel on the Multi Commodity Exchange (MCX), which rallied from about ₹1,150, slowed down after hitting a high of ₹1,626 in October. While the overall trend remains up, the contract is struggling to scale heights as it has done between March and October.
On the downside, ₹1,470 is an important level i.e., as long as the contract stays above this level, the short-term trend will be up. Yet, this week, nickel futures has bounced off the support at ₹1,530. The 21-day moving average coincides with this support, making it more significant.
Since the major trend is bullish, the chances of price appreciation from here is high. Supporting the positive outlook, the RSI is showing a fresh uptick and the ADX shows that bulls are gaining momentum.
From the current levels, the nearest resistance is ₹1,600. But the contract can be expected to move beyond this level and even rally past the prior high of ₹1,626 and touch ₹1,668. However, the pace of up-move can be slow and a breakout can help the contract gather strong upward momentum.
Considering the above factors, go long in nickel futures at current level and accumulate when price dips to ₹1,535. Initial stop-loss can be at ₹1,480 and revise it to ₹1,580 if contract moves above ₹1,626. Exit the longs at ₹1,668.
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