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The Lead futures contract on the Multi Commodity Exchange (MCX) has broken the ₹143-₹150 per kg sideways range on the downside.
The contract made a high of ₹148.45 per kg on Monday and tumbled over 4 per cent and is currently trading at ₹142.
break below ₹143 signals the resumption of the downtrend that has been in place since June.
The outlook is bearish. The region between ₹144 and ₹145 will now act as a resistance and can cap the upside in the near term.
An intermediate bounce to this resistance region may find fresh sellers coming into the market.
There is immediate support at ₹140. A break below this can drag the contract lower to ₹135 initially. If the contract manages to bounce up from ₹135, a relief rally to ₹140 and ₹143 is possible.
But if it declines decisively below ₹135, the downside pressure will intensify.
Such a break will then increase the likelihood of the contract tumbling to ₹129 or ₹128 in the coming weeks.
Trading strategy
Medium-term traders who have taken short positions at ₹147 can hold them with a revised stop-loss at ₹145.
Move the stop-loss lower to ₹142 as soon as the contract moves down to ₹139. Book profits at ₹136.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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