Lead futures on the Multi Commodity Exchange (MCX) have been on a downswing since early May. It fell off the resistance at ₹185 and since then, the contract has been trading below both 20- and 50-day moving averages. 

This shows that the overall bearish bias still exists and the trend will turn bullish only if lead futures decisively break out of the resistance at ₹185. The June expiry lead futures are currently trading at around ₹183. We expect the contract to see a fall in the upcoming sessions. 

Although there is support at ₹180, against which it rebounded last week, it is less likely to stop the bears this time around. Hence, the contract might fall to ₹175 in the near term. Subsequent support is at ₹173.

But if there is a recovery from here that can lift lead futures above ₹185, the outlook will turn bullish, and it will open the door for a potential rally to ₹190.

Trade strategy
  • We suggested going short on lead futures last week at ₹182.50. Hold this trade. Consider adding more shorts if the price inches up to ₹184. Place stop-loss at ₹186 initially.
  • When the contract touches ₹178, tighten the stop-loss to ₹180. Book profits at ₹176.