The Lead Futures contract on the Multi Commodity Exchange (MCX) is still trading within the ₹179-₹198 range.
It is currently trading at ₹181 per kg. However, the chances are high for the contract to break the range on the downside below ₹179 and see a fresh.
The trigger for this will come from the lead contract traded on the London Metal Exchange (LME). The LME Lead (3-month rolling forwards) contract has broken below the crucial support level of $2,000 per tonne.
It has closed on a weak note at $1,915 last week. The outlook is bearish, and the contract can fall to $1,800 in the short-term.
The bigger picture is also negative to see $1,600 on the downside over the medium-term. This can trigger a break below ₹179 on the MCX Lead contract.
Such a break can drag the contract down to ₹165 in the next two-three months. Positional trades with a two-three-month time horizon can be taken at the moment.
Trading strategy
Go short now and accumulate shorts on a rise at ₹185 and ₹190. Keep the stop-loss at ₹197. Trail the stop-loss down to ₹178 as soon as the contract falls to ₹174.
Move the stop-loss down to ₹171 as soon as the contract touches ₹168 on the downside. Book profits at ₹166.
The region between ₹195 and ₹198 is a strong resistance zone. The MCX Lead futures contract will have to breach ₹198 decisively in order to turn bullish again. But that looks less likely as seen from the price action on the charts.