The Lead futures contract on the Multi Commodity Exchange of India (MCX) had been volatile in the past week. The contract rose to a high of ₹148.65 on February 15 and fell sharply erasing all the gains. It made a low of ₹143 on Wednesday and has once again bounced up slightly from there. The contract is currently trading at ₹144 per kg.
The contract has been oscillating between the 100- and 200-day moving average levels of ₹143 and ₹148 respectively over the last couple of weeks. A breakout on either side of ₹143 or ₹148 will determine the direction of the next move. Traders can stay out of the market until a clear trend emerges.
A break below ₹143 will bring renewed pressure on the contract. Such a break can drag the MCX-Lead futures contract lower to ₹139 in the short term on the back of fresh selling.
On the other hand, if the contract manages to sustain above ₹143, an up-move to ₹148 is likely in the near-term. A strong break above ₹148 will boost the momentum and will take the contract higher to ₹153 and ₹155.
Global Trend
The Lead (3-month forward) contract on the London Metal Exchange (LME) was volatile in the past week. The contract fell sharply from a high of $2,084.5 per tonne on February 15 to make a low of $2,013 on Wednesday. But it has bounced up slightly from the low and is currently trading at $2,041 per tonne.
The psychological support level of $2,000 is holding well as of now. As long as the LME-Lead contract trades above $2,000, the outlook will be positive. A rally to $2,000 and $2,150 is possible in the short term.
The level of $1,985 is a crucial support. The outlook will turn negative only if the contract declines below this support. The next targets are $1,930 and $1,900.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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