Technical Analysis

MCX-Nickel futures remainsrange-bound

Yoganand D | Updated on December 19, 2018 Published on December 19, 2018

BL Research Bureau

The Nickel futures contract on the Multi Commodity Exchange of India is witnessing selling pressure at higher levels. The contract tumbled over 3 per cent, accompanied with good volume on Tuesday.

Key resistance in the band between ₹790 and ₹800 per kg is capping the upside in the contract. It tested this resistance band in early December as well as again in the early part of this week and began to decline. The contract has been range-bound between ₹750 and ₹800 since taking support at ₹750 in late November after falling sharply in the months of October and November this year.

A decisive break above ₹800 is required to turn the outlook positive for the contract. In that scenario, the contract can trend upwards to ₹830 and then to ₹850 in the short to medium term. The contract is now trading at ₹761 per kg. There is high possibility of the contract testing the lower boundary of the sideways consolidation at ₹750 in the near term.

It can remain range-bound for a while. But a decisive plunge below the key support level of ₹750 will reinforce the downtrend and drag the contract down to ₹740 and then to ₹730 in the near term. Next key supports are at ₹720 and ₹700.

Traders with a short-term perspective should tread with caution in the coming week and avoid taking fresh long positions at this juncture.

Global trend

The Nickel (three-month forward) contract on the London Metal Exchange continues to trend downward. Within the downtrend, the contract is range-bound between $10,700 and $11,200 per tonne. It has an immediate support at $10,700. A strong fall below this support can drag the contract down to $10,600 and then to $10,400. Key resistances are at $10,800 and $11,000.

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

Published on December 19, 2018
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