Commodity Calls

MCX-Lead showing fresh upward momentum

Akhil Nallamuthu BL Research Bureau | Updated on January 07, 2021

 

The rally in the price of lead futures on the Multi Commodity Exchange (MCX), that began in June 2020 from about ₹128, witnessed a corrective decline in September. But, prices resumed the uptrend in October from about ₹140 and, as a result, the January series marked a high of ₹164 before a month from now.

Unable to get past that level, the contract started to moderate. The correction dragged the price down to ₹155, losing nearly 6 per cent from its recent high of ₹164. But the contract found support in the form of 50-day moving average (DMA) at ₹155. Moreover, the 50 per cent Fibonacci retracement level of the previous uptrend coincides at this level, adding to the strength of the support.

 

On the back of this, the contract started rising with significant amount of volume, hinting at the revival in the uptrend. As price rallied, the contract moved past the resistance at ₹160 and the price is now above the 21-DMA.

Traders can buy MCX-lead with stop-loss at ₹155. A rally from here can take the contract towards the previous high of ₹164. A breakout of this level can lift the price to ₹168. Above that level it can appreciate to ₹175.

Published on January 07, 2021

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