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The Lead futures contract on the Multi Commodity Exchange (MCX) fell, breaking below the key 21-day moving average support in the past week. The contract has tumbled over 2 per cent in the past week. It is currently trading at ₹163 a kg. The sharp fall in the past week has triggered the stop-loss on the long positions recommended at ₹170 and ₹168 a couple of weeks back.
The 21-day moving average at ₹166.5 will now act as a strong resistance for the contract. As long as the contract remains below this resistance, the near-term view will be negative. A fall to ₹161 or ₹160 is likely in the coming days. Cluster of moving average(55-, 100-, and 200-moving averages) supports are poised in the band between ₹160 and ₹161. A bounce from this ₹160-₹161 support region will ease the downside pressure. In such a scenario, a relief rally to ₹165 or ₹166 is possible.
On the other hand, if the MCX-Lead futures contract breaks below ₹160, the current down-move can extend to ₹158.5 in the short term. The region between ₹158 and ₹159 is a crucial short-term support for the contract. The price action around this support region will need a close watch which would give a cue on the next trend. Traders can stayaway from the market.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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