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

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