The support in the ₹735-740 per kg zone for the Nickel futures contract traded on the Multi Commodity Exchange (MCX) has held well over the past week.

The contract made a low of ₹744.6 on November 30 and has bounced back from there. It tested the psychological ₹800 mark on Monday and has come off slightly from there. It is currently trading at around ₹789.

If the contract manages to move above ₹800 decisively, in the coming days it can rise to ₹820 in the short term.

The level of ₹820 is a strong trend-line resistance that has to be broken for the up move to extend further.

Inability to break above ₹820 and a subsequent reversal from there can drag the MCX-Nickel futures contract lower to ₹800 initially and to ₹780 thereafter.

In such a scenario, the contract can remain broadly range bound, between ₹740 and ₹820, for some time.

Strong support for the contract is in the band between ₹740 and ₹750. The outlook for the contract will turn negative if it declines below ₹740 decisively. Such a break can drag it lower to ₹720 and ₹710.

But on the charts, ₹740 is a strong support and a break below it is less likely. So dips to the ₹740-₹750 zone could be a good buying opportunity.

Traders with a big risk appetite can go long on dips at ₹750. A stop-loss can be placed at ₹735 for the target of ₹800.

Revise the stop-loss higher to ₹765 as soon as the contract moves up to ₹780.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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