The spot price of Nickel on the MCX seemed to be heading for sharp decline after breaching a key support last week. It even registered a six-month low of ₹922. But, after that, the metal began to consolidate in the band between ₹922 and ₹970. However, the major trend still remains bearish.

Similar to the spot price, the February futures contract of Nickel on the MCX has been treading sideways following a breakdown. While prolonged consolidation can increase the chance for a pull-back, the contract should decisively break above ₹1,000 for trend reversal.

The RSI and the MACD indicator on the daily chart are hinting at potential loss. However, both of them remain in bearish territory.

If the contract advances, it will face a hurdle at ₹981 — the 21-day moving average (DMA). Above that level, the resistance is at ₹1,000. This level is coincided by 50-DMA, making it a strong resistance. But, if bears regain traction, 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 London Metal Exchange has been consolidating for the past few trading sessions. The contract is trading below the key level of $13,000, and, since the major trend is bearish, chances of price decline looks highly likely. While $12,500 can act as a minor support, the contract could be dragged to $12,000.

 

blFeb6mwMCXNicklejpg
 

Trading strategy

The recent indications hint that the commodity price might witness a short-term recovery. But, since the major trend is bearish, the contract might face selling pressure as it advances. Hence, new trades can be planned either by shorting the contract with tight stop-loss if it rallies to ₹1,000 or by selling the contract if it breaks below ₹930 with ₹985 as stop-loss.

comment COMMENT NOW