MCX-Lead is stuck in a sideways range

The Lead futures contract on the Multi Commodity Exchange (MCX) has failed to breach the 200-day moving average resistance in the past week as expected. The contract made a high of ₹158.1 per kg on April 19 and has come-off from there. It is currently trading at ₹154 per kg.

Outlook unclear

The MCX-Lead futures contract has been stuck inside a sideways range between ₹150 and ₹159 over the last several weeks. This leaves the immediate outlook unclear for the contract. A breakout on either side of ₹150 or ₹159 will determine the next move.

A strong break below ₹150 can take the contract lower to ₹147. The region between ₹147 and ₹146 is a crucial long-term support zone which is likely to limit the downside. An immediate fall below ₹146 looks less probable. A strong upward reversal from this support zone will be bullish from a long-term perspective. Such a move could signal the beginning of a fresh leg of a long-term upmove which may have the potential to target ₹175 or even higher levels. But, if the MCX-Lead futures contract breaks below ₹146, the down-move can extend to ₹143 and ₹140 thereafter.

On the other hand, if the contract sustains above ₹150 and manages to break the current range above ₹159, it can gain fresh momentum. Such a break can take the contract higher to ₹165 and ₹167. It will also increase the possibility of the contract revisiting ₹170 and ₹172 levels over the medium term.

Trading strategy

Traders can stay out of the market until the range breakout gives a clear indication of the next trend for the contact.

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





Related

MORE FROM BUSINESSLINE


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