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The Lead futures contract on the Multi Commodity Exchange (MCX) has plummeted about 10 per cent over the last one week. It is currently trading at ₹147 per kg.
The sharp fall in the past week has dragged the contract decisively below the key ₹162-₹159 support region which was limiting the downside. Additionally, the fall on Thursday has taken the contract below a crucial long-term support level of ₹150. Both a trend-line as well as the 100-week moving average are poised around ₹150. Whether the contract manages to bounce-back above ₹150 or not will determine the next trend. As such the price action in the coming days will need a close watch.
If the contract manages to rise past ₹150, the downside pressure may ease. In such a scenario, a relief rally to ₹158 or ₹160 is possible in the short term. Also, the contract may then remain in a sideways range between ₹150 and ₹160 for some time.
But if the MCX-Lead futures contract remains below ₹150 in the coming sessions, it will continue to trade under pressure. In that case, there is a strong likelihood of the contract extending its fall to ₹140 in the coming days.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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