MCX Nickel hovers above a crucial support :-

The Nickel futures contract on the Multi Commodity Exchange (MCX) sustained above the support at 850 a kg and surged to test 900 as expected in the past week.

But, the contract failed to extend its rally beyond 900 and has come-off after making a high of 897.9 on last week to test the support at 850 again on Tuesday. It is currently hovering above this support at 866 .

Whether the contract manages to remain above 850 or not will decide the next move. If the contract sustains above 850, it can remain range bound between 850 and 900 for some time.

A strong break above 900 will boost the momentum. Such a break will increase the likelihood of the contract rallying to 920 and 935 in the coming weeks.

On the other hand, if the contract breaks below 850, it can come under renewed pressure.

In such a scenario, the contract can fall to 820. The region at around 820 is a strong medium-term support. As such, further fall below 820 is less probable at the moment.

Traders with a high-risk appetite can go short on a break below 850.

Stop-loss can be placed at 865 for the target of 820. Revise the stop-loss lower to 840 as soon as the contract moves down to 835.


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