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The Lead futures contract on the Multi Commodity Exchange (MCX) continues to trade in a sideways range. The contract has been stuck inside the ₹155 and ₹168a kg range for the last eleven consecutive weeks. Within this range, the contract fell to a low of ₹158 on Tuesday and has reversed sharply higher from there to ₹162.75 on Wednesday. The contract has come-off from this high and is currently trading at ₹161.50 .
The sideways range remains intact. But the immediate outlook is not clear as the contract is poised at the mid-point of this range.
The 21-week moving average at ₹158 has been limiting the downside in the contract over the last few weeks. This leaves the bias bullish and keeps the possibility high of the contract breaking above ₹168 in the coming days. A strong break above ₹168 will pave way for the next targets if ₹171 and ₹172. The 21-week moving average at ₹158 and a trend-line at ₹157 are the key near-term supports. A break below ₹157 is needed to drag the contract lower to ₹155 – the lower end of the range. Only if it breaches the ₹155 level, will the outlook turn negative for the contract. Such a break, though looks less probable at the moment, can increase the likelihood of the contract falling to ₹150 or even lower levels.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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