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The Lead futures contract on the Multi Commodity Exchange of India has been falling consistently over the last couple of weeks. After hitting a high of ₹156.4 per kg on October 15, the contract tumbled about 12 per cent to a low of ₹138.2. But, it has bounced from the lows and is currently trading at ₹144 per kg.
The MCX-Lead futures contract has been broadly range-bound between ₹137 and ₹157 over the last three months. The bounce from the low of ₹138.2 keeps the range intact. An immediate resistance is in the ₹145-₹147 region. Inability to breach this hurdle can drag the contract lower to ₹140 and ₹138 again. A break below ₹138 will see a test of ₹136 – the 200-day moving average support level. A further decisive break below ₹138 will then drag the contract lower to ₹130 or ₹129 in the coming days.
On the other hand, if the MCX-Lead futures contract manages to breach ₹147 decisively, the downside pressure will ease. Such a break will then take the contract initially higher to ₹151. A further break above ₹152 will then increase the likelihood of the contract extending its up-move to ₹155 and ₹157.
Trading strategy
Traders with a high risk appetite can go long on a break above ₹147. Stop-loss can be placed at ₹144 for the target of ₹155. Revise the stop-loss higher to ₹149 as soon as the contract moves up to ₹151.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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