The Lead futures contract on the Multi Commodity Exchange (MCX) sky-rocketed 7 per cent on Wednesday. This strong rally has taken the contract well above the key resistance in the range between ₹154-₹155 a kg. Following this surge the contract opened with a gap-up on Thursday and made an intra-day high of ₹161.5 . However, it failed to sustain higher and has come-off from there. It is currently trading at ₹158.4 . The contract is unlikely to extend its rally immediately in the near term. As such a slight pull-back move to ₹155 is possible in the coming days.

The level of ₹155 may now act as a good resistance turned support and can limit the downside in the contract. An eventual upward reversal from ₹155 can take the contract higher to ₹160 once again. A strong break above ₹160 will then pave way for the next target of ₹164.

The near-term downmove can be a good opportunity for traders with a short-term perspective to initiate long positions. Buy the contract on dips at ₹156. Stop-loss can be placed at ₹152 for the target of ₹162. Revise the stop-loss higher to ₹157 as soon as the contract moves up to ₹159.

The bullish outlook will get negated only if the contract declines below ₹155 decisively. Such a fall can take the MCX-Lead futures contract lower to ₹153-₹152 initially. Further break below ₹152 can drag it to ₹149. But such strong fall looks unlikely at the moment.

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

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