The Lead futures contract on the Multi Commodity Exchange of India (MCX) witnessed a sharp fall in the past week. The contract made a high of ₹146.85a kg on November 2 and had reversed sharply lower from there. The contract tumbled over 5 per cent from that high to make a low of ₹138.85 on Tuesday. But, it has bounced slightly higher from there and is currently trading at ₹141.5 .
The bounce from the low of ₹138.85 keeps the broader ₹137-₹157 sideways range intact. The contract has been stuck inside this ₹137-₹157 range for past three months. Traders can stay out of the market until a clear trend emerges.
The near-term outlook within this range remains unclear. If the contract sustains above ₹138 and gains momentum, an upmove to ₹145 or ₹147 is likely in the near term. If the contract manages to rise past ₹147 decisively, the upmove can extend towards ₹152 or even ₹155.
On the other hand, if the contract fails to gain momentum from current levels and declines below ₹137, the downside pressure will increase. In such a scenario, there is a strong likelihood of the contract falling to ₹131 and ₹130 in the coming days.
The region between ₹131 and ₹130 is a crucial long-term support level for the contract. Whether the contract manages to reverse higher from this support zone or not will be crucial in deciding the next move. As the prices action around ₹131 and ₹130 will need a close watch if the contract declines breaking below ₹137 in the coming days.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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