Commodity Calls

Supports can provide cushion for MCX Lead

Gurumurthy K BL Research Bureau | Updated on January 27, 2018

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.

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.

Published on January 26, 2018

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