Comments
The spot price of Nickel on the MCX continues to take a sideways path as it consolidates in the band between ₹930 and ₹970. Unless the contract breaches either of the limits of this range, the next leg of trend cannot be confirmed. However, the trend prior to the consolidation has been bearish and this could have an effect on the commodity price going forward.
The price of February futures contract of Nickel, similar to the spot price, has been oscillating in a sideways trend between ₹930 and ₹967. Though the RSI and the MACD indicator on the daily chart remains in their respective bearish territory, the recent movement indicates a loss of momentum for the bears. Thus, a prolonged consolidation at current levels might result in trend reversal.
On the upside, the contract has a considerable hurdle at ₹967, where the upper limit of the range is coincided by the 21-day moving average. In case the contract breaks out of DMA level, it can rally to the critical resistance at ₹1,000. This level is coincided by 61.8 per cent Fibonacci retracement level of prior downtrend. On the other hand, if the contract weakens and slips below ₹930, it might decline to ₹900. A break below that level can drag the contract price to ₹870.
On the global front, the price of three-month rolling forward contract of Nickel on the LME consolidates in the range between $12,500 and $13,365. But the major trend remains bearish. While support below $12,500 is at $12,000, resistance above $13,365 is at $13,740.
Trading strategy
Though major trend remains bearish, the price of nickel has been consolidating for the past two weeks. Taking this into account, traders can initiate fresh short positions in MCX-Nickel futures only if price breaks below ₹930 decisively. Stop-loss can be placed at ₹975.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.