MCX-Lead moves sideways with a bearish bias

The lead futures contract on the Multi Commodity Exchange (MCX) has been stuck in a sideways range over the last one month. The contract has been range-bound between ₹142 and ₹152 per kg. Within this range, the contract is hovering above the lower end of the range at ₹144 per kg. A breakout on either side of ₹142 or ₹152 will determine the next move. Traders can stay out of the market until the range breakout gives a clear cue.

If the contract breaks below ₹142, it can come under renewed pressure. Such a break can drag the contract lower to ₹137 or ₹135. A bounce from the ₹137-₹135 support zone can trigger a relief rally to ₹142 or ₹145. But if the contract declines below ₹135 decisively, the down-move can extend to ₹132 or even ₹130.

On the other hand, if the MCX-Lead futures contract sustains above ₹142 in the coming days, an up-move to ₹152 – the upper end of the range is possible. Inability to breach ₹152 can pull the contract lower to ₹145 and ₹142 again. The sideways range will remain intact in such a scenario. The contract will gain momentum only if it manages to breach ₹152 decisively. Such a break can take it to ₹154 or ₹157.

However, the price action on the weekly chart leaves the bias bearish. The longer wicks on the weekly candle charts indicate that the contract is getting strong selling pressure in the range between ₹150 and ₹152. This keeps the possibility high of the contract breaking below ₹142 in the coming days.

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

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