MCX-Nickel continues to trend sideways

The spot price of Nickel on the MCX , which had been in a downtrend for long, witnessed a corrective rally since early December last year. However, the price started to decline after the rally stopped at ₹1,080. The current market price is ₹1,042.

Similar price movement can be observed in January futures contract as well. The contract attempted to recover after a decline, but stopped moving beyond ₹1,055. As we can observe on the daily chart, the contract is in a consolidation phase oscillating between ₹1,010 and ₹1,055 and unless the price gets out of that range, the next leg of trend cannot be confirmed. Noticeably, the major trend remains bearish.

The daily RSI is flat but the MACD indicator on the daily chart stays upwards, giving a bullish bias.

The current unclear trend is likely to remain until the contract stays within ₹1,010 and ₹1,055. If the contract breaches the support at ₹1,010 on the back of major downtrend, it will most likely decline to the previous low at ₹965. Support below that level is at ₹920. On the other hand, if the contract manages to breakout of the resistance at ₹1,055, the nearest hurdle will be at ₹1,100. Above that level, the resistance is at ₹1,125.

On the global front, the price of three-month rolling forward contract of nickel on the London Metal Exchange broke below the support at $13,875. But it has recouped some if its losses and is currently trading at around $13,940. Support below $13,875 is at $13,370 and the nearest resistance is at $14,526.

Trading strategy

Futures contract of Nickel on the MCX continues to consolidate. But one can take a bearish view since the overall trend is bearish. Since ₹1,010 is a considerable support, traders are advised to initiate fresh short positions only below ₹1,010 with a stop-loss at ₹1,055.