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BL Research Bureau
After seeing a sharp fall in early March this year, the Nickel price started to recover steadily towards the end of March. The continuous contract of nickel on the Multi Commodity Exchange (MCX) began its rally by taking the support at ₹1,150. But since April, the contract has been gaining steadily and consequently, two weeks ago, it marked a fresh high of ₹1,641.6. However, the contract was not able to move beyond that and started to fall. Although the trend remains bullish, and it is currently hovering around the key support of ₹1,500, there is a good chance for the contract dipping to ₹1,450 before establishing another leg of uptrend.
Rather than going all in at current levels, traders can initiate trades in two parts. That is, go long at ₹1,500 and buy again if the price moderates to ₹1,450, where 38.2 per cent Fibonacci retracement lies. Place initial stop-loss at ₹1,390. If the contract resumes uptrend, it can experience a slowdown at around ₹1,550. So, consider exiting half of the longs at that price. After that, shift the stop-loss to ₹1,480 and wait for the next potential target at ₹1,640. In case if the contract rallies past ₹1,550 before declining to ₹1,450, stop-loss for the first leg of buy can be maintained at ₹1,480.
From the current levels, the key supports are at ₹1,450 and ₹1,400. Until the contract stays above ₹1,400, the trend will remain bullish.
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