The Lead futures contract on the Multi Commodity Exchange (MCX) was stuck in a narrow range between ₹160 and ₹166 per kg in the past week. In the broad sideways range between ₹155 and ₹168 the contract has been trading over the last two months.

However, the bias within this broad sideways movement remains bullish for the contract as the 21-week moving average continues to provide strong support over the last several weeks. This leaves the possibility high of the contract breaking above ₹168 in the short-term.

A decisive weekly close above ₹166 will be an initial sign indicating that the contract is gaining momentum and is on the verge of breaching ₹168. Such a break above ₹168 will pave way for the next targets of ₹171 and ₹172.

Both the 21-week moving average and a trend-line support poised at ₹159 is the key near-term support. A strong break below ₹157 is needed to bring renewed selling pressure on the contract.

Such a break can drag the contract lower to ₹155 — the lower end of the range. However, the outlook will turn negative only if the contract decisively breaks below ₹155.

Such a break, though looks less probable at the moment, will increase the possibility 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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