MCX Lead faces a key hurdle

Last week, the Lead futures contract on the Multi Commodity Exchange (MCX) gained 2.6 per cent breaching a key resistance at ₹160 per kg.

However, the contract encountered another resistance at ₹165 and witnessed a corrective decline. The contract found support at ₹160 on Wednesday and began to rally. It is currently trading at ₹162.5/kg.

It has breached its 21- and 50-day moving averages and hovers well above them. Corrective decline can find support at around ₹160 once again in the near-term. An emphatic breakthrough of the immediate resistance at ₹165 can push the contract higher to ₹170.

Further breach of the significant resistance level of ₹170 is required to strengthen the uptrend and take the contract higher to ₹175 in the medium-term.

Traders with a short-term perspective can consider initiating fresh long positions only if the contract moves beyond ₹165 levels with a fixed stop-loss at ₹162.

But if the contract fails to breach above ₹165 and falls below the immediate support level of ₹160, it can bring back selling pressure. In that case, the contract can decline to ₹157 and ₹155 levels in the short-term.

It can continue to move sideways in a broad range between ₹155 and ₹165 for some time.

A conclusive break out of this sideways range will decide its medium-term.

Key supports below ₹155 are pegged at ₹152 and ₹150 levels.

Note: The recommendations are based on technical analysis and 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



 Getting recommendations just for you...
This article is closed for comments.
Please Email the Editor