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It has been a volatile week for the Lead futures contract traded on the Multi Commodity Exchange (MCX). The contract rose to a high of ₹167.35 per kg last Friday and has reversed sharply lower from there. This downward reversal has dragged the contract breaking below the key support level of ₹160. The long positions recommended last week has been stopped-out during this fall. It is currently trading at ₹158.5.
The near-term view is negative. Resistance is at ₹161 which can cap the upside. The contract will gain fresh momentum only if it breaks above ₹161 decisively. Such a break can take the contract higher to ₹165-167 or even ₹170 levels again.
As long as the contract trades below ₹161, it is more likely to extend its down move to test the next support at ₹154 in the coming days. If it manages to bounce from the support level of ₹154, the downside pressure may ease. In such a scenario, a relief rally to ₹160 or ₹161 is possible. But if the contract breaks below ₹154, it can fall further to ₹152. The level of ₹152 is a key medium-term trend-line support which is likely to halt the fall. An immediate fall below ₹152 is less probable. A strong upward reversal from this support may have the potential to take the contract higher to ₹160 or more.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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