The February futures of lead on the Multi Commodity Exchange (MCX), which has been moving in a sideways trend between ₹160 and ₹165, broke out of this range before a couple of weeks. Since then, it has gradually been moving upwards and is currently hovering around ₹170. The volume profile has been good over the past week i.e., it has been increasing steadily, signifying the strength of the uptrend.

Corroborating the upward inclination, the daily relative strength index stays above the mid-point level of 50 and the moving average convergence divergence indicator on the daily chart is tracing an upward trajectory. Also, the price is well above the 21- and 50-day moving averages (DMAs) and the average directional index (ADX) is indicating that the rally is strong.

Substantiating the bullish bias, the three-month rolling forward contract of the metal in the London Metal Exchange (LME) has moved back above the $2,100-mark and hinting at extension of the northward movement.

Hence, the uptrend looks to sustain and so, the futures contract in MCX is likely to see an increase in price going forward. On the upside, it can touch ₹175 in the near term. A breakout of this level can take the contract to ₹180.

Considering the above reasons, traders can stay bullish and initiate fresh long positions with stop-loss at ₹165.

Related Topics
comment COMMENT NOW