The Lead futures contract on the Multi Commodity Exchange (MCX) has been stuck in a broad sideways range for a prolonged period of time.
The contract has been trading in the range of ₹179 and ₹196 per kg since September last year. Within this range, the contract has been hovering above the lower end of this range for almost a month now. It is currently trading at ₹185. The stable movement above ₹180 indicates lack of strong sellers in the market to drag it below the range support level of ₹179.
As such the sideways range remain intact. We can expect the MCX Lead Futures contract to move up towards ₹190-₹195 – the upper end of the range in the coming weeks. Traders can go long at current levels and accumulate on dips at ₹181. Stop-loss can be placed at ₹177.
Trail the stop-loss up to ₹187 as soon as the contract moves up to ₹191. Move the stop-loss further up to ₹190 as soon as the contract touches ₹193. Exit the long positions at ₹195.
The contract will come under pressure only on a strong break below ₹179. Such a break will be very bearish. It will indicate a top in place. It will also mark the end of the uptrend that has been in place since March and will signal a trend reversal. In such a scenario, the MCX Lead futures contract can see a fall to ₹172-170 initially and then even steeper going forward.