Resistance may cap the upside in MCX-Lead

Lead futures contract on the Multi Commodity Exchange (MCX) has been stuck in a narrow sideways range in the past week. The contract has been range-bound in the band between Rs 144 and Rs 149 over the last one week.

This sideways consolidation has halted the downtrend that has been in place over the last few weeks. The near-term outlook is mixed. However, the overall downtrend remains intact.

If the contract manages to sustain above Rs 144 and breaches Rs 149, a relief rally to Rs 152 is possible on the back of short-covering in the near term. But an up-move breaking above Rs 152 is less probable.

A pull-back from Rs 152 can drag the contract lower to Rs 145-144 again. An eventual break below Rs 144 will see the downtrend resuming to Rs 140 initially. Further break below Rs 140 will then increase the likelihood of the contract extending its fall to Rs 135 or even lower levels thereafter.

Trading strategy

Medium-term traders who have taken short positions at ₹147 can hold it. Accumulate short positions at Rs 150 and Rs 152. Retain the stop-loss at Rs 155 for the target of Rs 135. Revise the stop-loss lower to Rs 145 as soon as the contract moves down to Rs 141.

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

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