The Lead futures contract on the Multi Commodity Exchange fell 9.5 per cent breaking below its key 21-day moving average support at ₹156 per kg in the past week. It is currently trading near ₹142.5 per kg.

There is some more room left for a further fall.

Significant supports lie between ₹139 and ₹138 which are likely to be tested in the near-term. The level of ₹138 is the 100-day moving average support.

Since the contract has been falling sharply over the last few weeks, it is likely to find base around the ₹139-₹138 support zone.

A subsequent reversal from this support region may trigger a relief rally going forward. In such a scenario, the contract can bounce back to ₹150 thereafter.

Short-term traders can go long on a reversal from ₹138. Stop-loss can be placed at ₹132 for the target of ₹149.

On the other hand, if the MCX Lead contract breaks below ₹138/kg decisively, it may come under renewed pressure. Such a break can take it lower initially to ₹135 – the 61.8 per cent Fibonacci retracement support level.

Further break below ₹135 will increase the likelihood of the fall extending to ₹130 or even lower.

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

Published on December 22, 2016