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Lead futures on the Multi Commodity Exchange (MCX) found support at ₹180 last week and moved up. However, it was unable to surpass the resistance at ₹186.
On the back of the barrier at ₹186, lead futures started to decline. On Tuesday, it closed at ₹182.95.
Since the contract fell off the resistance at ₹186, the chart shows that the contract has formed a lower high. Also, the price is below both 20- and 50-day moving averages, which coincide at ₹185.
Given the above factors, the chances for lead futures to fall from here are high. The contract is likely to slip below the support at ₹180 and decline to ₹173, a support, in the near term. Below this, there is another support at ₹170.
But if lead futures recover from here and break out of ₹186, the outlook will turn positive. In this case, the contract can move up to ₹190 and then potentially to ₹196.
That said, as it stands, the bias is bearish.
Trading strategy
Short lead futures now at ₹182 with a stop-loss at ₹186.50. When the contract falls below ₹180, revise the stop-loss to ₹183. Book profits at ₹173.
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