The Nickel continues to consolidate sideways for over a month. The October expiry futures contract of Nickel is fluctuating between ₹1,200 and ₹1,285 a kg. The contract moved past the 21- day moving average (DMA) and is currently trading at ₹1,258 and the month-to-date return stands at 3.5 per cent.
Price action suggests that that contract has formed a key base in the band between ₹1,200 and ₹1,205 — the 23.6 per cent Fibonacci retracement level. As long as those levels hold, the commodity can be approached with a bullish bias.
Holding on the bullish bias, if the commodity contract breaks out of ₹1,285, it will face a hurdle at ₹1,315 and beyond that it could move further towards ₹1,370 over the medium term. On the other hand, if the price breaks below the support band between ₹1,200 and ₹1,205, there could be a change in medium-term trend and the contract could weaken to ₹1,138. Before that, the contract might find support at ₹1,180 levels — the 50-DMA.
Global trend
The three-month rolling forward contract of Nickel in London Metal Exchange is supported by $17,000 levels as there is buying support whenever the price reaches $17,000. There has been an uptick in price since the beginning of the month and if the buying gains traction, it will face resistance in the band between $18,000 and $18,135 on the upside, beyond which it could retest the 52-week high at $18,850. Alternatively, a break below $17,000 could change the medium-term trend to bearish one where the contract could be dragged to $16,385.
Trading strategy
MCX-Nickel is on a marginal rise since the beginning of the month. However, unless its breaks above ₹1,285, the rallies in-between might not be sustainable. Hence, traders are recommended to stay on the sidelines until either of ₹1,200 or ₹1,285 is decisively broken.
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.