Since early January 2019 low of ₹735 per kg, the Nickel futures contract on the MCX has been on a medium-term uptrend. While trending up, the contract had conclusively breached the key resistances at ₹800 and ₹850. But the contract met with a key barrier at ₹956 in early February and witnessed a corrective decline that ended in mid-February finding support at ₹856. Subsequently, the contract changed direction and continued to trend upwards. Recently, it breached a vital resistance at ₹900 and is paused well above this level which has turned into a key support now. The contract currently trades at ₹916.

Furthermore, the contract trades well above its 50- and 200-DMAs. As long as the contract trades above the key support level of ₹900, the near-term outlook will remain bullish. The contract can extend the upmove and reach the short-term price target of ₹935 and ₹950 levels.

A decisive break above the significant medium-term resistance level of ₹950 will strengthen the uptrend and take the contract higher to ₹970 and ₹1,000 over the medium-term. Conversely, a conclusive fall below the immediate support level of ₹900 can drag the contract to the next key base level of ₹860 and ₹840. That said, only a vital break below ₹840 will bring back bearish momentum and drag the contract down to ₹810 and ₹800 levels over the medium-term.

Traders with a high-risk appetite can buy in declines while maintaining a fixed stop-loss at ₹890 levels. Targets are ₹935 and ₹950.

Global trend

The Nickel (three-month forward) contract on the LME has been in a medium-term uptrend since early January this year. The contract is poised below a key resistance level of $13,000. A decisive break above this resistance will strengthen the up-move and take the contract northwards to $13,350 levels. Key supports are at $12,500, $12,300 and $12,000.

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