Towards mid-December last year, the futures contract (January contract) of nickel on the Multi Commodity Exchange (MCX) faced selling pressure after registering a high of ₹1,333. The contract had then witnessed selling pressure and declined to mark a low of ₹1,210.1 by December-end, thereby losing a little over 9 per cent from ₹1,333.
The contract swiftly recovered and last week it pipped above the prior high as it made a high of ₹1,334. But, it was unable to make a higher high and then depreciated to ₹1,300. Thus, the contract has been struggling to cross over ₹1,330 levels.
There are no indications of a bearish reversal yet and the price continues to trade above both 21- and 50-day moving averages (DMAs). The relative strength index, though lying above the midpoint level of 50, has stayed flat over the past couple of weeks.
If the contract manages to decisively break out of the previous high of ₹1,334, it can run up to ₹1,368. Immediate resistance above this level at ₹1,380. But if price slips below ₹1,245 – its 50-DMA, it will most likely retest the critical support at ₹1,200.