Technical Analysis

MCX-Lead tests a key barrier

Yoganand D BL Research Bureau | Updated on December 27, 2018 Published on December 27, 2018

The Lead futures contract on the Multi Commodity Exchange of India has been trading in a narrow range between ₹136 and ₹140 per kg over the past one week.

With a gain of 0.8 per cent, the contract was hovering at ₹140.15 per kg, testing the upper end of the range on Thursday. A strong rally above this resistance level can take the contract higher to ₹143 and then to ₹145 in the short term. A strong break above the key resistance level of ₹145 will reinforce the bullish momentum and take the contract northwards to ₹150 over the short- to medium-term horizon.

On the other hand, the contract has an immediate support at ₹136 and a fall below this level can drag the contract down to ₹133 in the short term. A further break below this base will strengthen the intermediate-term downtrend that has been in place since encountering a vital resistance at ₹170 in early June 2018.

A strong rally above ₹155 is required to alter this downtrend and take the contract higher to ₹160 levels. Key supports below ₹133 are at ₹130 and ₹125 levels. Traders with a short-term view should tread with caution and consider initiating fresh long positions on a decisive rally above ₹140 with a fixed stop-loss.

Global trend

The Lead (three-month forward) contract on the London Metal Exchange has been on a sideways consolidation phase in the band between $1,900 and $2,020 per tonne since mid-October 2018.

The LME-Lead contract can remain in this sideways range for a while. The contract is heading higher to test $2,000 and $2,020 — the upper end of the range in the near term. A break above this level can strengthen the upmove and take the metal price higher to $2,100. But a fall below the key support at $1,900 can drag the contract down to $1,850 levels.

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


Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get

This article is closed for comments.
Please Email the Editor