The Lead futures contract on the Multi Commodity Exchange (MCX) has managed to bounce higher after falling initially in the past week. The contract fell to a low of ₹146.9 a kg on Monday and has reversed higher from there. It is currently trading at ₹151.3 . The 200-day moving average at ₹147 has halted the contract’s sharp fall that happened from the high of ₹161.5 recorded on August 17. The 200-day moving average will be a key support to note. As long as the contract trades above this support, there is high possibility of it to test the resistance at ₹156 in the coming days. Inability to break above this hurdle can keep the contract range bound between ₹147 and ₹156 for some time.

The 55-day moving average is on the verge of crossing above the 200-day moving average. This is a bullish signal indicating that the downside could be limited as of now. As such there is a strong likelihood of the contract breaking above ₹156 in the coming days. Such a break can take the contract higher to ₹160 again. Further break above ₹160 will pave way for the next targets of ₹163 and ₹165. Traders with a short-term perspective can make use of dips to go long at ₹148. Stop-loss can be placed at ₹145 for the target of ₹154. Revise the stop-loss higher to ₹149 as soon as the contract moves up to ₹151.

The outlook will turn negative only if the contract declines below the 200-day moving average support decisively. In such a scenario, the contract can fall to ₹145 or ₹143.

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

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