The Lead futures contract on the Multi Commodity Exchange (MCX) has been volatile in the past week. It fell sharply in the initial part of the week, breaking below the key support level of ₹160 per kg.

However, after making an intra-week low of ₹154.8 per kg on Monday, the contract reversed higher recovering the loss made during the week. The contract made a high of ₹161.4 on Wednesday and has come-off slightly from there. It is currently trading at ₹159.5 per kg.

The 21-day moving average at ₹162.5, which is likely to be tested in the near-term, is the key resistance to watch. Whether the contract manages to break above this hurdle or not will determine the next leg of move.

Inability to break above ₹162.5 can pull the contract lower to ₹160 or ₹159 initially. A further break below ₹159 will increase the likelihood of the fall extending to ₹157 or ₹155 again. This will keep intact the downtrend that has been in place since the October high of ₹171.1.

In such a scenario, the possibility of the contract falling to ₹152 or even ₹150 over the medium-term will remain high.

On the other hand, if the MCX-Lead futures contract manages to breach above ₹162.5 decisively, it can gain fresh momentum. Such a break will ease the downside pressure and take the contract higher to ₹165 initially. A further break above ₹165 will then pave way for the next target of ₹170.

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

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