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It was a volatile week for the Lead futures contract on the Multi Commodity Exchange (MCX). The contract rose to a high of ₹172.5 per kg on last Friday and has reversed sharply from there. The contract has tumbled over 6 per cent from this high and is currently trading at ₹161. The sharp and sudden fall in the past week has dragged the contract below a key support at ₹163. This is a very crucial support level as both the 100-day moving average as well as a medium-term trend-line are poised around this level.
If the contract manages to bounce back above ₹163 in the coming sessions, the downside pressure may ease. In such a scenario, an upmove to ₹165 and ₹168 is possible again.
But, inability to bounce above ₹163 from current levels can keep the contract under pressure. As long as the contract remains below ₹163, further fall in the coming days cannot be ruled out. A fall to ₹155 is possible while the contract remains below ₹163.
Short-term traders can wait for a bounce and go short if the contract reverses lower again from ₹163. Stop-loss can be placed at ₹167 for the target of ₹156. Revise the stop-loss lower to ₹161 as soon as the contract moves down to ₹159.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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