The Lead futures contract on the Multi Commodity Exchange (MCX) is range-bound. The contract has been stuck in a sideways range between ₹143 and ₹150 per kg for over three weeks. It is currently trading at ₹148 per kg.

The near-term outlook is unclear. A breakout on either side of ₹143 or ₹150 will decide the next move.

If the contract fails to breach ₹150 in the coming days, the sideways range will remain intact and a fall to ₹145 is possible in the near term. A strong break and a decisive close below ₹145 will be an initial sign of weakness. It will increase the possibility of the contract breaking the current range below ₹143. A strong fall below ₹143 can target ₹140. Further break below ₹140 can drag the contract lower to ₹136 over the short term.

On the other hand, if the contract manages to close decisively above ₹149, it can gain fresh momentum. In such a scenario, the possibility of the contract breaking the current sideways range above ₹150 will increase. A strong break above ₹150 can take the contract higher to ₹152. A strong break above ₹152 will boost the momentum. Such a break will pave way for the next targets of ₹155 and ₹157. It will also ease the downside pressure. But inability to breach ₹152 can pull the contract lower to ₹150 and ₹149 again.

Trading strategy

Medium-term traders who have taken short positions at ₹147 can hold it. Revise the stop-loss lower to ₹153 for the target of 136. Move the stop-loss further lower to ₹145 as soon as the contract declines to ₹141.

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

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