Outlook is bullish for MCX-Lead

The Lead futures contract on the Multi Commodity Exchange (MCX) has surged breaking above the key resistance level of ₹150 per kg as expected in the past week. The contract made a high of ₹153.9 on Wednesday and fell sharply reversing from there. However, the support in the ₹150-₹149 region has halted this fall and the contract has bounced back once again on Thursday. It is currently trading at₹151.75 per kg. There is an inverted head and shoulders bullish pattern formed on the chart. The neck-line of this pattern is at ₹149 that has become a key support. As long as the contract trades above ₹149, the outlook will remain bullish. Resistance is at ₹154 which is likely to be tested in the near term. A strong break above this hurdle can take the contract higher to ₹156 initially. Further break above₹156 will increase the likelihood of the contract extending its rally to ₹160 and ₹162 thereafter.

Short-term traders can go long on dips at ₹150. Keep the stop-loss at ₹148 for the target of ₹154. Revise the stop-loss higher to ₹151 as soon as the contract moves up to ₹152.5.

The near-term view will turn negative only if the contract declines below ₹149 decisively. The next target is ₹147. Further strong fall below ₹147 will increase the possibility of the down move extending to ₹145 or even ₹143.

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

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