Lead futures (April contract) on the Multi Commodity Exchange (MCX), witnessed a price decline over the past couple of weeks. It fell off the resistance at ₹183, and on Tuesday it closed at ₹177.30.

The contract is likely to extend the downswing further, possibly to ₹170, before making a U-turn. After softening to ₹170, we expect lead futures to establish a rally. The contract can move up to retest ₹183, where the 50-day moving average coincides now.

Note that the price region between ₹166 and ₹170 is crucial support. This base has held true since June 2021. But a breach of this can turn the medium-term trend bearish. The nearest notable support levels below ₹166 are at ₹158 and ₹150.

Trade strategy

Stay on the fence. Go long on lead futures if it moderates to ₹172. Add more longs at ₹170. Place stop-loss at ₹165. When the contract rallies past ₹180, raise the stop-loss to ₹175. Liquidate the longs at ₹183.