The lead futures contract on the Multi Commodity Exchange (MCX) has been consolidating in a sideways range between ₹145 and ₹155 per kg for more than a month now.

A breakout on either side of ₹145 or ₹155 will decide the next trend for the contract. Within this consolidation, the contract is currently trading around the mid-point of this range, around ₹151 per kg.

There is a high possibility for the contract to move higher to test ₹155 — the upper end of the range — in the near term. However, traders can stay out of the market until a range breakout gives a clear cue on the next trend. A strong break above ₹155 can bring in fresh momentum for the contract. Such a break will confirm that the corrective fall that has been in place since February has ended.

The contract will then gear up for a fresh rally to ₹165 initially. Further break above ₹165 will see the upward move extending to ₹170 or even ₹175 thereafter.

On the other hand, if the contract fails to break above ₹155 in the coming days it can retain its sideways movement for some more time.

The contract will come under renewed pressure if it breaks below ₹145 decisively. Such a break can increase the downside pressure. In such a scenario, the MCX-lead futures contract may fall to ₹140 or even lower levels thereafter.

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

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