The Lead futures contract on the Multi Commodity Exchange (MCX) has been stuck in a narrow range between ₹132 a kg and ₹137.5 for the fourth consecutive week. Within this range, the contract fell to a low of ₹132.3 on Wednesday and is bouncing higher from there. It is currently trading at ₹133.75.
As long as the contract manages to sustain above ₹132, the sideways range will remain intact. A rise to ₹137 — the upper end of the range — is possible in the coming days. A breakout on either side of ₹132 or ₹137.5 will decide the next trend.
A break below ₹132 may bring in renewed downside pressure on the contract. Such a break can drag it lower to ₹130 initially. A further break below ₹130 will increase the likelihood of the fall extending to ₹127 or even to ₹125 in the coming weeks.
On the other hand, a key trend-line resistance is poised around ₹138. So, the contract may need some fresh trigger to breach the current sideways consolidation upwards, that is above ₹138.
Such a break will ease the downside pressure. It will also give an initial signal of a reversal in the downtrend that has been in place since February.
Such a break above ₹138 can take the MCX-Lead futures contract higher to ₹140 initially. A further break above ₹140 will increase the possibility of the contract extending its up move to ₹144 or ₹147.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading
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