MCX Lead faces a key resistance zone ahead

Gurumurthy K BL Research Bureau | Updated on January 09, 2018

The bounce back move in the Lead futures contract on the Multi Commodity Exchange (MCX) seems to lack strength. The contract had reversed higher from the low of ₹156.2 a kg made on November 17. This bounce back move faced strong resistance in the ₹160-₹161 region. After attempting to breach above ₹161 several times in the last few days, the contract has reversed lower, and is currently trading at ₹157 .

The contract will gain fresh momentum only on a strong break and a decisive close above ₹161. Such a break will ease the downside pressure and take the contract higher to ₹167 or even to ₹170 thereafter.

Short-term traders with a high-risk appetite can go long on a decisive break above ₹161. Stop-loss can be placed at ₹159.5 for the target of ₹166. Revise the stop-loss higher to ₹162 as soon as the contract moves up to ₹164.

On the other hand, if the MCX Lead futures contract continues to trade below ₹161, it can remain under pressure. In such a scenario, there is a strong likelihood of it falling to ₹154.5 in the coming days. A break below ₹154.5 can pull the contract further lower to ₹153. The level of ₹153 is a crucial medium-term trend-line support which can halt the down move. A strong upward reversal from this support level of ₹153 may have the potential to take the contract to ₹160 or even higher levels again.

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

Published on November 23, 2017

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