MCX Tips, Near-term view is negative for MCX Nickel

The nickel futures contract on the Multi Commodity Exchange (MCX) fell in the past week.


The contract made a high of ₹917.8 per kg on last Thursday and has come-off from there. It has tumbled 4.7 percent from this high and is currently trading at ₹875. The near-term view is negative. The contract can extend the downmove to test the 21-day moving average support at ₹862.

A break below ₹862 will drag the contract further lower towards the crucial ₹850-847 support region. Whether the contract manages to bounce from this support zone or not will then decide the next move.

A decisive break below ₹847 will increase the likelihood of the contract tumbling towards ₹830 or ₹825 on the back of profit booking.

On the other hand, if the contract manages to bounce from the ₹850-₹847 support zone, the downside pressure would ease.

A bounce back towards ₹900 and ₹910 is likely in such a scenario. It will also indicate the formation of an inverted head and shoulders pattern on the chart. This is a bullish continuation pattern and in this case, it will mean that the uptrend is intact and could resume going forward.

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