Commodity Calls

MCX Lead moves sideways with a positive bias

Yoganand D BL Research Bureau | Updated on October 04, 2018 Published on October 04, 2018

The lead futures contract on the Multi Commodity Exchange (MCX) has been consolidating sideways for the past one month. Following a medium-term downtrend, the contract found support at its 52-week low, recorded at₹137 a kg in mid-August 2018.

Since then, the contract has been trending upward. Within this uptrend, the contract has been in a sideways movement in the band between ₹142 and ₹152. On Monday, the contract surged 2.4 per cent breaching the 21- and 50-day moving averages. Currently, the contract trades near the upper boundary at ₹151.7 with a positive bias.

The daily relative strength index is on the brink of entering the bullish zone from the neutral region and the weekly RSI feature in the neutral region.

The daily as well as weekly price rate of change indicators feature in the positive territory implying buying interest. A conclusive break-out of the upper boundary can strengthen the uptrend that has been in place since mid-August. In such a scenario, the contract can extend the up move to ₹155 and then to ₹157 in the short term.

A further rally beyond ₹157 can take the contract northwards to ₹160, which is a key medium-term resistance level.

Inability to move beyond ₹152 could keep the contract range-bound for a while. Key supports within the range are at ₹147 and ₹145.

On the other hand, a decisive plunge below the lower boundary at ₹142 can drag the contract down to ₹140 and ₹137.

Traders with a short-term perspective should remain on the sidelines as long as the contract is range-bound. Fresh long positions can be initiated on a decisive rally above ₹152 with a fixed stop-loss.

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

Published on October 04, 2018

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.