The Lead futures contract on the Multi Commodity Exchange (MCX) retains is in sideways movement. The contract has been stuck in a sideways range between ₹150 and ₹159 a kg for the past more than two months. Within this range, the contract had surged to a high of ₹157.65 on Tuesday and has come-off from this high. It is currently trading at ₹155 per kg.

The prolonged sideways move continues to keep the outlook mixed for the contract. A breakout on either side of ₹150 or ₹159 will give a clear cue on the next trend.

Since the contract has been declining over the last couple of days, the possibility is high of it moving towards ₹150 – the lower end of the range in the near term. But, if the contract manages to bounce from ₹150, the sideways range will remain intact. In such a scenario, a fresh rally to ₹155 and ₹157 is possible. If the contract breaks below ₹150 decisively, it can come under pressure. Such a break can take the contract lower to ₹147 or ₹146. As mentioned last week, the region between ₹147-₹146 is a strong long-term support and a fall below ₹146 is less likely. As such an upward reversal from this support zone will be bullish from a long-term perspective.

On the other hand, if the MCX-Lead futures contract remains above ₹150 in the coming days and breaks the range above ₹159, it can gain bullish momentum. Such a break can take it higher to ₹165 or ₹167. Further break above ₹167 will pave way for the next targets of ₹170 and ₹172.

Trading strategy

The bias is bullish on the chart. Traders with a medium-term perspective can go long on dips at ₹151. Stop-loss can be placed at ₹144 for the target of ₹165. Revise the stop-loss higher to ₹155 as soon as the contract moves up to ₹161.

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

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