MCX-Lead likely to test key near-term supports

The Lead futures contract on the Multi Commodity Exchange (MCX) has reversed sharply lower after making a high of ₹153.4 a kg on Monday. The contract fell to a low of ₹147.65 on Wednesday and has managed to bounce slightly higher from there. It is currently trading at ₹148.5 . The 200-day moving average at ₹147 and a trend-line support at ₹146.5 are the key near term supports. The contract will come under strong selling pressure if it declines below ₹146.5. In such a scenario, the contract can fall to ₹143.5 initially. Further break below ₹143.5 will then increase the likelihood of the fall extending to ₹140.

Short-term traders with a high-risk appetite can wait for the contract to break below ₹146.5 and go short at ₹146. Stop-loss can be placed at ₹148.5 for the target of ₹141. Revise the stop-loss lower to ₹145 as soon as the contract moves down to ₹143.5.

On the other hand, if the MCX-Lead futures contract manages to sustain above the ₹147-₹146.5 support region it can move up to ₹153 or ₹154. In such a scenario, a range bound move between ₹146.5 and ₹154 is possible for some time. Only a strong break above ₹154 will ease the downside pressure. Such a break can take the contract higher to ₹156.

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





MORE FROM BUSINESSLINE


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