The Lead futures contract on the Multi Commodity Exchange (MCX) has been stuck in a sideways range over the last week. The contract is hovering above the key short-term support level of ₹159 per kg and is range-bound between this support at ₹159 and the 21-day moving average resistance at ₹164.

Within this range, it is currently trading at ₹161 per kg. A breakout on either side of ₹159 or ₹164 will determine the next trend for the contract. Traders can stay out of the market until the range breakout gives a clear cue on the next trend as well a confirmed trade signal.

If the contract breaks below ₹159 decisively, it can come under renewed pressure. A fall to ₹157 or ₹156 is possible initially. A bounce-back from these levels can see a relief rally to ₹160 again. But if the contract falls further, below ₹156, it will increase the possibility of a fall to ₹154 or even lower thereafter.

On the other hand, if the contract manages to sustain above ₹159, the possibility of it breaking the range above ₹164 will increase. Such a break will keep the uptrend that has been in place since June intact. It will also bring strength to the contract. In such a scenario, the contract can revisit ₹170 and ₹171 levels.

A further break above ₹171 will boost the momentum and will increase the likelihood of the contract targeting ₹175 and ₹177 levels over the medium-term.

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

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