The Lead futures contract on the Multi Commodity Exchange (MCX) recorded a 52-week low at ₹137.25 per kg on August 20 and found support at this low.
The contract has reversed higher subsequently and has been in a near-term upmove since then. It has advanced 0.7 per cent in today’s session and trades at around ₹141.2 per kg. The contract has a key resistance ahead at ₹143 and this resistance could limit the upside in the near term, leading to a sideways movement in the range between ₹137 and ₹143 for a while. Following a sharp fall in the previous week, the contract is now in a corrective rally. A strong upward break-out of ₹143 will strengthen the upmove and extend the corrective rally to ₹147 and ₹150 levels. Traders should tread with caution as long as the contract trades below ₹143 in the coming week. A strong breakthrough of ₹143 will be a positive cue to take long positions with a stop-loss at ₹140. Targets are ₹147 and ₹150 levels.
Since encountering a significant resistance at ₹170 in late May and again in early June, the contract started to declines and has been in a medium term downtrend. To alter this downtrend, the contract needs to decisively move beyond the crucial trending-deciding band between ₹150 and ₹157. Such a break can push the contract higher to ₹163 and ₹167 over the medium term. On the other hand, a plunge below the immediate support level of ₹137 can pull the contract down to ₹135 and ₹132 levels.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.