MCX-Lead trades above a key support

The Lead futures contract on the Multi Commodity Exchange (MCX) failed to sustain above the intermediate support at ₹150 a kg in the past week. The contract fell breaking below this support and made a low of ₹148.55 on Tuesday.

The bounce-back move from this low lacked strength and the contract has reversed lower again from ₹154.25. It is currently trading at ₹149. The region between ₹147 and ₹148 is a key support region.

A strong break below ₹147 can increase the selling pressure in the contract. Such a break can take the contract lower to ₹145 initially.

Further break below ₹145 will increase the possibility of the contract extending its fall to ₹143 and ₹140 thereafter.

On the other hand, if the MCX-Lead futures contract manages to sustain above ₹147 and reverses higher, it can move up to ₹154 or ₹155. Inability to break above ₹155 can keep the contract range bound in the band between ₹147 and ₹155 for some time. But if the contract manages to surpass the resistance at ₹155 decisively, it can gain momentum.

Such a break will signal that the uptrend that has been in place since June is intact. The contract can revisit ₹160 and ₹161 levels in such a scenario. Further break above ₹161 will pave way for the next target of ₹165.

Traders can stay out of the market at the moment. Watch the price action for a few sessions after the market opens on Monday after a long weekend to get a clear idea on the next trend and take trade positions accordingly.

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