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For about a month, the price of lead has stayed largely flat. This is despite other base metals facing a sharp sell-off between early April and mid-May. Thus, the continuous contract of lead on the Multi Commodity Exchange (MCX) is treading in the range of ₹180-186. Therefore, the broader range of ₹180-195, within which lead futures has been oscillating since October last year, holds true.
That means, the short-term trend depends on the direction of the break of the range ₹180-186, whereas the next leg of the long-term trend will be decided on the breach of the broader range ₹180-195. In either case, ₹180 is a strong support. To be precise, the price band of ₹178-180 is a good base.
A breakout of ₹186 can lift the contract to ₹190 and then possibly to ₹195. On the other hand, a breach of ₹180 could grab the attention of sellers, and prices could quickly drop to ₹174, its nearest support. Subsequent support can be spotted at ₹168.
Strategy: We had recommended longs between ₹180 and ₹182.5 on May 4 and May 17. Traders who hold this position can retain the longs with stop-loss at ₹177. If the contract touches ₹187, revise the stop-loss to ₹184. Tighten the stop-loss further to ₹189 when the contract rises to ₹193. Exit the longs at ₹196. But for fresh positions, wait for the breakout of ₹186 before going long, and make same adjustments as mentioned above.
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