Lead futures contract on the Multi Commodity Exchange (MCX) has risen sharply in the past week.

After hovering at Rs 160 per kg in the initial part of the week, the contract surged breaking above this level. MCX-Lead futures contract has rallied over 6 per cent in the past week and is trading at Rs 170 per kg.

The bullish outlook remains intact. An immediate support is in between Rs 168 and Rs 169 which is likely to limit the downside in the near term. Dips to this support region might find fresh buying interest coming into the market.

Also, the indicators on the charts signal that the current upmove is likely to continue. The 21-day moving average is on the verge of crossing over the 100- and 200-day moving averages. This is a bullish signal indicating that the downside could be limited.

As such, the contract can move further higher in the coming days and target Rs 174 and Rs 175 levels. A strong break above Rs 175 will see the upmove extending to Rs 177 or Rs 178.

However, the region between Rs 177 and Rs 178 is a key long-term trend resistance which is likely to halt the current upmove. A pull-back from the Rs 177-178 resistance region can trigger a corrective fall to Rs 170 or even Rs 165.

Traders with a high-risk appetite can go long at current levels and also accumulate at Rs 168.5. A stop-loss can be placed at Rs 167 for the target of Rs 176. Revise the stop-loss higher to Rs 172 as soon as the contract moves up to Rs 173.5.

The near-term view will turn negative only if the contract declines below Rs 168. Such a break can drag it to Rs 164.

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

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