Commodity Calls

MCX-Lead stuck in a narrow range

Gurumurthy K BL Research Bureau | Updated on January 10, 2018 Published on September 14, 2017

The Lead futures contract on the Multi Commodity Exchange (MCX) tumbled 3.6 per cent on Friday. Since then, the contract has been stuck in a narrow range between ₹143 and ₹147 a kg. Technically, the contract is stuck in between the 100-day moving average support at around ₹143 and the 200-day moving average resistance at around ₹147. A breakout on either side of ₹143 or ₹147 will decide the next leg of move.

If the contract manages to break above the 200-day moving average at ₹147 decisively, the downside pressure may ease. A rise to ₹150 is possible in that case. Further break above ₹150 will increase the likelihood of the upmove extending to ₹154 or ₹157 thereafter.

However, cluster of resistance is seen at around ₹147 which make the possibility less of the contract breaking above ₹147. As such there is a strong likelihood of the contract breaking below the 100-day moving average support level of ₹143 in the coming days. Such a break can take the MCX-Lead futures contract lower to ₹140 initially. Further fall below ₹140 will increase the downside pressure and drag the contract lower to ₹135.

Short-term traders with high risk appetite can go short on a break below ₹143. Stop-loss can be placed at ₹144 for the target of ₹140.

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

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