Commodity Calls

MCX-Lead moves in a narrow range

Gurumurthy K | Updated on January 15, 2018 Published on April 27, 2017


The Lead futures contract on the Multi Commodity Exchange (MCX) has managed to bounce slightly higher in the past week. The contract made a low of ₹137 a kg last Friday and has reversed higher from there. However, the price action on the daily chart suggest that this bounce back move lacks strength. The contract has been hovering in a narrow range below the 200-day moving average since it broke this support on April 18. It has been stuck in the band between ₹136 and ₹142 since then. The contract is currently trading near the upper end of this range at ₹141.35. A strong break and a decisive close above ₹142 will ease the downside pressure. Such a break can take the contract higher to ₹145 or even ₹148 in the short term. The level of ₹148 is a significant trend-line resistance. A downward reversal from this level will keep the channel movement intact which has been in place since February. In such a scenario, the possibility is high of the contract falling to ₹145 and ₹143 levels thereafter.

On the other hand, if the MCX-Lead futures contract fails to break above the 200-day moving average resistance in the coming days, it can continue to remain under pressure. A downward reversal from this hurdle can take the contract lower to ₹136 once again. Further break below ₹136 will increase the likelihood of the contract extending its fall to ₹133 or ₹132.5 thereafter.

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

Published on April 27, 2017
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