Gurumurthy K It was a volatile week for the Lead futures contract on the MCX. The contract surged breaking above the 200-day moving average resistance and made a high of ₹153.5 on Monday. However, the contract has come-off sharply giving back almost all the gain and is currently trading at ₹149 per kg.
The key resistance in the ₹151-152 region is holding well as of now. As long as the contract trades below this resistance zone, there is a strong likelihood of it falling towards ₹147 in the near term. A break below ₹147 will then increase the possibility of the downmove extending towards ₹145 or ₹143 thereafter.
The contract will have to rise past ₹152 decisively to bring back the positive sentiment. In such a scenario, the downside pressure will ease, and the contract can then target ₹155 and ₹157 levels.
Traders can stay out of the market for sometime.
Global trend
The Lead (three-month forward) contract on the LME has come-off after making a high of $2,136.5 per tonne on Tuesday. The 200-DMA at $2,125 has capped the upside and has triggered the fall. The contract is currently trading at $2,090 per tonne.
Immediate support is at $2,070 which can be tested in the near term. If the contract manages to bounce from this support, an upmove to revisit $2,100 and $2,125 is possible again. The contract will gain fresh momentum if it breaks above $2,125 decisively. Such a break will then increase the likelihood of the contract rallying towards $2,170 and $2,200 thereafter.
On the other hand, the LME-Lead contract will come under more pressure if it breaks below the immediate support level of $2,070. In such a scenario, a fall to $2,025 or even $2,000 cannot be ruled out.