MCX-Lead faces a key resistance point

The Lead futures contract on the Multi Commodity Exchange (MCX) has managed to sustain above the key support level of ₹140 a kg and has reversed sharply higher in the past week.

The contract surged over 6 per cent to a high of ₹150 on Wednesday. But it has come off slightly from this high and is currently trading at ₹148. A key near-term resistance is in the ₹150-₹151 zone. A strong break and a decisive close above ₹151 is needed for the contract to gain fresh momentum. Such a break can take the contract higher to ₹153.5. Inability to break above ₹153.5 can trigger a pull-back move to ₹151-₹150 once again. But if the contract manages to break above ₹153.5 decisively, the upward move can extend to ₹155 initially. A further break above ₹155 will see the rally extending to ₹160 or even higher levels.

On the other hand, if the MCX-Lead futures contract fails to break above the immediate resistance at ₹151 in the coming days, then it can fall to ₹145. A further break below ₹145 will increase the likelihood of the down move extending to ₹143 and ₹141.

Short-term traders with a big risk appetite can wait for dips and go long if the contract reverses higher from ₹145. A stop-loss can be placed at ₹141 for the target of ₹152. Revise the stop-loss higher to ₹148 as soon as the contract moves up to₹150.

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

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