Commodity Calls

Near-term outlook is mixed for MCX-Lead

Gurumurthy K BL Research Bureau | Updated on July 05, 2018 Published on July 05, 2018

The Lead futures contract on the Multi Commodity Exchange (MCX) has fallen sharply in the past week. The contract faced resistance at around ₹168 and tumbled over 5 per cent to make a low of ₹159 per kg on Thursday. The contract has bounced slightly from this low and is currently trading at ₹163 per kg.

The immediate outlook is mixed. Cluster of moving average supports are poised in the band between ₹162 and ₹160 and then a key trend support is at ₹159. The contract is managing to sustain above these supports at the moment. The price action in the coming sessions will need a close watch which would give a cue on whether the contract will reverse higher or will decline below ₹159. Traders can stay out of the market until a clear trend emerges.

If the contract continues to remain above ₹160 and decisively breaches ₹163, the downside pressure would ease. Such a break will take the contract higher to ₹168 and ₹170 levels again. The contract may remain range-bound between ₹159 and ₹172 for some time.

On the other hand, if the MCX-Lead futures contract breaks below ₹159, it will come under renewed selling pressure. Such a break can drag the contract lower to ₹155 initially. Further break below ₹155 will then increase the likelihood of the contract extending its fall to ₹152 or even ₹150.

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

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