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The lead futures contract on the Multi Commodity Exchange (MCX) has reversed sharply higher over the last couple of weeks. The contract made a low of ₹137.25/kg on August 20 and has moved up sharply, surging over 7 per cent. It currently trades at ₹147/kg.
The strong rally has taken the contract well above the key ₹144-₹145 resistance region. Immediate resistance is in the ₹148-₹149 region. A break above ₹149 will ease the downside pressure and can take the contract higher to ₹151 or ₹152 in the near term. Further break above ₹152 will then boost the momentum and increase the likelihood of the contract rallying to ₹155 or even ₹157 over the short term.
On the other hand, if the MCX-lead futures contract fails to breach the immediate resistance region, it can witness a pull-back move. The contract can then decline to test the 21-day moving average support at ₹144. A range-bound move between ₹144 and ₹149 is possible for some time. The contract will come under pressure only if it breaks below ₹144 decisively. Such a break will then drag the contract lower to revisit ₹140 or even ₹137.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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