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BL Research Bureau
The uptrend in the nickel futures contract traded on the Multi Commodity Exchange (MCX) is gaining momentum. The contract surged 3.3 per cent last week and has closed on a strong footing. It has also begun the trading this week on a positive note. It is currently trading at ₹1,568 per kg.
Immediate resistance is at ₹1,585, which can hold on to its first test. A short-lived pull-back move to ₹1,550-₹1,540 or ₹1,520 cannot be ruled out. However, the broader view will continue to remain bullish. There is an inverted head and shoulder bullish pattern visible on the chart. The neckline support of this pattern is at ₹1,545. Another strong support is at ₹1,520. As such, the expected pull-back from ₹1,585 could be limited to ₹1,545-₹1,540 or ₹1,520.
The outlook will remain bullish as long as the contract stays above the ₹1,540-₹1,520 support zone. It will also keep the chances high of the contract breaking above ₹1,585 eventually in the coming days. Such a break will pave the way for a fresh rise to ₹1,750-₹1,800 in the coming weeks.
Traders with a short-term perspective can go long at current levels. Accumulate longs on dips at ₹1,555 and ₹1,530. Keep the stop-loss at ₹1,480. Book profits at ₹1,730. Trail the stop-loss up to ₹1,585 as soon as the contract moves up to ₹1,625. Move the stop-loss further up to ₹1,640 as soon as the contract touches ₹1,695.
This bullish outlook will get negated if the contract breaks below ₹1,520. Such a break can drag it to ₹1,450.
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