Lead futures contract on the Multi Commodity Exchange (MCX) encountered a key resistance at ₹162.7 on Tuesday and started to decline.
The contract has moved below its 200-day moving average at 158.7 recently and currently trades at ₹157.8 per kg.
Following an upward break out of a sideways range, it met with a key medium-term resistance and 50 per cent fibonacci retracement level of its prior downtrend at ₹162. This level can continue to act as a key resistance in the near-term.
Only a decisive break above this level will reinforce the short-term uptrend that has been in place from the support level of ₹150.
Such a breakthrough can pave way for an up move to ₹165 and then to ₹168 in the short-term.
But, a tumble below the immediate support at ₹156 will drag the contract down to ₹153 and ₹150 levels in the short-term. In that case, the medium-term downtrend that has been in place from the February peak of ₹172 will be intact.
A downward break of the key support at ₹150 will further drag the contract down to ₹146 and ₹143 levels in the medium-term.
Traders with a short-term view should tread with caution and initiate fresh short positions on a decisive fall below ₹156 levels. Targets are ₹153 and ₹150.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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