Lead futures on the Multi Commodity Exchange (MCX) declined sharply between May 29 and June 14. But then, the downtrend lost momentum, and the contract started to trace a sideways trend.

In the last three weeks, the July expiry lead futures have oscillated between ₹187 and ₹191. The chart shows the contract faces strong rejection at the ₹191 resistance, where the 50-day moving average coincides. This indicates short interest at this price level.

Hence, at the moment, the likelihood of a fall is high. We expect lead futures to resume the downtrend from here, slip below the support at ₹187 and decline to ₹180 in the forthcoming weeks. However, if the contract surpasses the barrier at ₹191, it can appreciate to ₹196. Nevertheless, a rally beyond ₹196 is unlikely, for it is a significant barrier.

Go short on lead futures (July series) at the current market price of ₹190. Place stop-loss at ₹192.50. When the contract touches ₹187, modify the stop-loss to ₹190. Tighten the stop-loss further to ₹187 when the price hits ₹183. Liquidate the shorts at ₹180.