The spot price of Nickel on the MCX continues to consolidate within the range between ₹930 and ₹970. Though the overall trend is bearish, the next leg of trend cannot be confirmed until the contract breaches either of the limits of this range.

Similarly, the price of February futures contract of Nickel has been fluctuating in a sideways trend between ₹930 and ₹967. But noticeably, the price stays below the 21-DMA, giving it a bearish inclination. For the contract to reverse the trend, it has to breach the resistance at ₹967.

The daily RSI remains sluggish, but it is hovering below the mid-point level of 50. On the other hand, the MACD indicator on the daily chart is indicating signs of recovery and so prolonged consolidation at current levels might result in trend reversal.

On the upside, the contract has a hindrance at ₹967. In case the contract breaks out of that level, it can rally to ₹1,000 — a critical level. This zone is coincided by 61.8 per cent Fibonacci retracement level of prior downtrend. Alternatively, if the contract weakens and slips below ₹930, it might decline to ₹900. A break below that level can drag the contract to ₹870.

On the global front, the price of three-month rolling forward contract of Nickel on the London Metal Exchange consolidates in the band between $12,500 and $13,365. However, the major trend remains bearish and the daily RSI shows a fresh downtick. Support below $12,500 is at $12,000 whereas resistance above $13,365 is at $13,740.

Trading strategy

The major trend of the metal on the MCX is bearish. But as the futures contract is in consolidation phase since the beginning of the month, it is not recommended to sell at current levels. Traders can open fresh short positions with a stop-loss at ₹975 only if price breaks below ₹930 decisively.

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