MCX Lead may see corrective fall

The Lead futures contract on the Multi Commodity Exchange (MCX) has been in a medium-term uptrend since taking support at around ₹132 a kg in early June 2017.

Following a corrective decline, the contract got support at ₹143 in early September and resumed its uptrend.

While trending up, the contract had emphatically breached its moving average compression (21-, 50- and 200-day moving average) at around ₹147 in September. The short-term trend is also up for the contract.

On Tuesday, the contract gained 3.3 per cent with the above average volume breaking a key resistance of ₹164. However, the contract retreated 2.5 per cent in the next trading session, encountering a key resistance at ₹170. It is currently trading at ₹167, up 0.66 per cent.

Corrective declines can find support either at ₹164 or ₹160 in the near-term. An upward reversal from these supports can take the contract higher to ₹170. The short-term uptrend will be in place as long as the contract trades above ₹155. Traders with a short-term horizon should tread with caution and buy the contract in declines with a fixed stop-loss at ₹159.

An upward reversal can take the contract higher to ₹170 once again.

An emphatic break above the key resistance level of ₹170 will reinforce the bullish momentum and take the contract higher to ₹175 in the short-term.

Key supports below ₹155 are at the ₹150 and ₹147 levels.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading.