The MCX-Lead futures contract on the Multi Commodity Exchange fell, breaking below the key support level of ₹138 per kg, in the past week. The fall has ended the prolonged sideways consolidation in the band between ₹138 and ₹148. The contract tumbled over 5 per cent from a high around ₹141 to a low of ₹133.15 on Tuesday. But, the contract has bounced up marginally from the low and is currently trading at ₹136 per kg.

The near-term outlook is mixed. Support is at ₹133 and resistance at ₹138. The MCX-Lead futures contract may remain range-bound between ₹133 and ₹138 in the near term. A breakout on either side will then decide the next move.

A strong break above ₹138 will ease the downside pressure. Such a break will then take the contract higher to ₹140 and ₹143.

But the broader downtrend that has been in place since June remains intact. Also, the strong fall below ₹138 in the past week keeps the bias negative. This leaves less possibility of the contract breaching above ₹138 in the coming days.

As such, an eventual break below ₹133 will increase the likelihood of the MCX-Lead futures contract extending its downmove toward ₹130 in the coming days.

The level of ₹130 is a crucial long-term support which may have the potential to halt the current downtrend. As such, the price action around this support will need a close watch.

Range-bound on LME

The Lead (three-month forward) contract on the LME is still in sideways range. The contract has been stuck in the range between $1,900 and $2,030 per tonne over the last few weeks. Within this range, the contract fell last week from around $2,000 to make a low of $1,897 on Tuesday. But, it has bounced from the low and is trading at $1,925 currently. The sideways movement is likely to remain intact. As long as it sustains above $1,900, a revisit of $2,000 and $,2030 levels is possible again in the coming days.

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

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