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The Lead futures contract on the Multi Commodity Exchange witnessed a strong rally in the past week.
The contract surged 9 per cent to record a high of ₹151.45 per kg on Wednesday. Though the contract reversed lower from this low, it has managed to bounce back once again from near ₹145 and is currently trading around ₹148/kg.
Immediate resistance is in the band between ₹149 and ₹150. As long as the contract trades below this resistance region, a dip to ₹143 or ₹142 is possible.
A subsequent reversal from the ₹143-₹142 support zone may keep the contract in a sideways range between ₹142 and ₹150 for some time. A strong break and a decisive close above ₹150 is needed for the contract to boost momentum. Such a break can take the contract higher to ₹154 and ₹155.
The bias on the chart is bullish. As such there is a strong likelihood of the contract sustaining above the ₹143-142 zone.
Short-term traders can wait for dip and go long on a reversal from ₹143. Stop-loss can be placed at ₹139 for the target of ₹150.
Revise the stop-loss higher to ₹145 as soon as the contract moves up to ₹148.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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