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The Fibonacci resistance at ₹810/kg has held well for the second consecutive week in the nickel futures contract traded on the Multi Commodity Exchange (MCX). The contract made a high of ₹816.5 on Monday and has declined from there. It is currently trading at ₹757. Key support is in the ₹740-735 zone which might be tested in the near-term. Traders can stay out of the market until a clear signal emerges.
If the contract reverses higher from ₹735, it can trend up to ₹800 and test the resistance at ₹810 once again. A strong break and a decisive daily close above ₹810 will boost the bullish momentum. Such a break can take the nickel futures contract higher to ₹820 and ₹825.
On the other hand, if the contract declines below the support at ₹735, it may come under pressure. Such a fall will increase the likelihood of the contract declining to ₹715 or even ₹700 thereafter.
There is a strong trend-line support at around ₹700. As such, the downside in the contract is expected to be limited to ₹700 if it declines below ₹735. A strong reversal from ₹700 will be bullish from a medium-term perspective.
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