The Lead futures contract on the Multi Commodity Exchange (MCX) has fallen sharply in the past week. The contract faced resistance at around ₹168 and tumbled over 5 per cent to make a low of ₹159 per kg on Thursday. The contract has bounced slightly from this low and is currently trading at ₹163 per kg.

The immediate outlook is mixed. Cluster of moving average supports are poised in the band between ₹162 and ₹160 and then a key trend support is at ₹159. The contract is managing to sustain above these supports at the moment. The price action in the coming sessions will need a close watch which would give a cue on whether the contract will reverse higher or will decline below ₹159. Traders can stay out of the market until a clear trend emerges.

If the contract continues to remain above ₹160 and decisively breaches ₹163, the downside pressure would ease. Such a break will take the contract higher to ₹168 and ₹170 levels again. The contract may remain range-bound between ₹159 and ₹172 for some time.

On the other hand, if the MCX-Lead futures contract breaks below ₹159, it will come under renewed selling pressure. Such a break can drag the contract lower to ₹155 initially. Further break below ₹155 will then increase the likelihood of the contract extending its fall to ₹152 or even ₹150.

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

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