The Lead futures contract on the Multi Commodity Exchange (MCX) fell in the past week as expected to test the support level of ₹155 per kg.

The contract dropped to a low of ₹155 on Wednesday but has reversed higher from there. It is currently trading at ₹159/kg.

The upward reversal from ₹155 has increased the possibility of the contract moving higher to test ₹161 and ₹162 levels in the near-term. Whether or not the contract breaks above the ₹161-162 resistance region will determine the next move.

Traders can stay out of the market for some time.

Watch the price action in the coming days to get a cue on the next move to take a trade position.

If the contract manages to surpass ₹162 decisively, it can gain momentum. Such a break can take the contract higher to ₹165 initially.

Further break above ₹165 will increase the possibility of the up-move extending to ₹166.5 or ₹167 thereafter.

On the other hand, if the contract reverses lower after testing the ₹161-162 resistance region, it can fall to ₹156 or ₹155 levels once again. In such a scenario, a sideways move between ₹154 and ₹162 is likely.

On the charts, the possibility of this sideways move between ₹154 and ₹162 looks likely for a few weeks.

The region between ₹154.5 and ₹154 is a strong and crucial support for the contract and is likely to limit the downside in the short-term.

The contract will come under renewed pressure only if it declines below ₹154 decisively.

Such a break can drag the contract lower to ₹150 or ₹149 thereafter.

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

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