Lead futures (December contract) on the Multi Commodity Exchange (MCX) has been falling since the beginning of the current week. It fell off the barrier at ₹185 and it closed at ₹182.6 on Wednesday. It declined in the first half of Thursday and is hovering around ₹181.
That said, the contract is now approaching a strong support base. The price region between ₹179 and ₹180 has been tapped by the bulls to gain traction and lift the price of lead futures in the past.
Therefore, the chances are high for lead futures to witness a bounce off the above-mentioned support level. If there is a recovery, the contract can retest the hurdle at ₹185. A breakout of this can lift the price to ₹188.
On the other hand, if the contract slips below ₹179, we will most likely see another leg of downtrend, potentially to ₹172.
Trade strategy
Buy lead futures at the current level of ₹181 and place stop-loss at ₹178. Book profits at ₹185.