The June futures contract of nickel on the MCX has been in a consolidation phase over the last month. It has been oscillating between ₹900 and ₹960 and the contract should breach either of these levels to establish a trend. Last week it attempted to break out of ₹960 where it registered an intra-week high of ₹974.3. The contract is currently trading at ₹930.
Though the contract has been largely moving sideways, there are a few bullish indications. The 21-day moving average (DMA) has crossed over the 50-DMA and the daily relative strength index (RSI) stays above the midpoint level of 50. Also, the moving average convergence divergence (MACD) indicator on the daily chart remains in the positive territory. Taking these factors into account, it can be assumed that the contract is likely to trend towards.
On the back of the prevailing bullish bias, if the contract gathers momentum and breaches the upper boundary of the range, that is, ₹960, it might rise to ₹1,000. Above that level, ₹1,025 can act as a resistance. But if the contract weakens further and breaches the lower boundary of the range, that is, ₹900, the nearest support is at ₹860. Subsequent support is at ₹838.
On the global front, the three-month rolling forward contract of nickel on the London Metal Exchange (LME) broke out of the resistance at $12,340 last week and rallied to $12,800. However, the price moderated and is now hovering around $12,350. As long as the price is above $12,340, it is likely to remain bullish.
Trading strategy
While the price action of the contract on the MCX is sideways, globally, the metal seem to be displaying bullish bias as indicated by the contract on the LME. So, traders can initiate fresh long positions if the contract rallies past ₹960 — a key resistance level. Stop-loss can be at ₹900.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
Thank you for being a loyal user of Portfolio.
Portfolio will be a paid section hereon.
Please Subscribe to get access to one of our early bird packs.
Or click on Free Trial to get 14 days free trial.
What You'll Get
-
Web + Mobile
Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.
-
Exclusive Portfolio and Investment Advice, Banking, Lifestyle and Specials
Get diverse set of perspectives from our trusted experts on Portfolio, Banking, Economy, Environment and others.
-
Ad free experience
Experience cleaner site with zero ads and faster load times.
-
Personalised dashboard
Customize your preference and get a personalized recommendation of stories based on your interest.
Published on
May 27, 2020
A letter from the Editor
Dear Readers,
The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.
Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.
In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.
We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.
But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.
I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.
A little help from you can make a huge difference to the cause of quality journalism!
Support Quality Journalism