Commodity Calls

MCX-Lead under pressure

Gurumurthy K | Updated on January 11, 2018 Published on July 20, 2017


Contrary to our expectation, the lead futures contract on the Multi Commodity Exchange (MCX) has failed to break above the resistance at ₹152 per kg and has come off sharply in the past week. The contract has tumbled over 5 per cent in the past week from ₹149 to make a low of ₹141 on Wednesday.

The contract has bounced back slightly from this low and is currently trading at ₹142 per kg. This sharp fall has dragged the contract well below a key support level of ₹145. Immediate support is in the ₹140-139.80 region. If the contract manages to sustain above this support, a range bound move between ₹140 and ₹145 is possible for some time.

But if the MCX-lead futures contract declines below ₹139.8, the downside pressure can increase. Such a break can pull the contract lower to ₹137 initially. Further break below ₹137 will increase the likelihood of the contract’s downmove extending to ₹133.

The contract will have to break above ₹145 to alter the outlook to positive. Such a break will ease the downside pressure and take the contract higher to ₹151 levels once again. But such a strong rally looks less probable in the near term.

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

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Published on July 20, 2017
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