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The Lead futures contract on the Multi Commodity Exchange (MCX) tested the key resistance level of ₹168 per kg as expected in the past week.
Contrary to our expectation to breach this hurdle, the contract has reversed lower.
The contract made a high of ₹168.75 and has come-off sharply from there on the final trading session of the week giving back all the gains made during the week. It is currently trading at ₹164/kg.
Support is at ₹163.5 which is very near to current trading level. If the contract manages to bounce from this support, a revisit of ₹168 is possible.
A strong break and a decisive close above ₹168 will boost the momentum. Such a break can take the MCX Lead futures contract higher to ₹171 or ₹172 initially. Further break above ₹172 will then increase the likelihood of the contract targeting ₹176.
Traders with a medium-term perspective can go long at current levels and accumulate at ₹163 and ₹162.
Keep the stop-loss at ₹158 for the target of ₹176. Revise the stop-loss higher to ₹166 as soon as the contract moves up to ₹169.
On the other hand, if the contract breaks below the immediate support at ₹163.5 in the coming days, it can fall to ₹162 or ₹161.
The region between ₹162 and ₹161 is a strong support zone for the contract.
But further decline below ₹161 looks less probable at the moment.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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