The Lead futures contract on the Multi Commodity Exchange (MCX) tumbled 3.6 per cent on Friday. Since then, the contract has been stuck in a narrow range between ₹143 and ₹147 a kg. Technically, the contract is stuck in between the 100-day moving average support at around ₹143 and the 200-day moving average resistance at around ₹147. A breakout on either side of ₹143 or ₹147 will decide the next leg of move.
If the contract manages to break above the 200-day moving average at ₹147 decisively, the downside pressure may ease. A rise to ₹150 is possible in that case. Further break above ₹150 will increase the likelihood of the upmove extending to ₹154 or ₹157 thereafter.
However, cluster of resistance is seen at around ₹147 which make the possibility less of the contract breaking above ₹147. As such there is a strong likelihood of the contract breaking below the 100-day moving average support level of ₹143 in the coming days. Such a break can take the MCX-Lead futures contract lower to ₹140 initially. Further fall below ₹140 will increase the downside pressure and drag the contract lower to ₹135.
Short-term traders with high risk appetite can go short on a break below ₹143. Stop-loss can be placed at ₹144 for the target of ₹140.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading
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