The uptrend in lead, which is in place since May 2020 from about ₹130, seem to have lost traction recently. Consequently, the continuous contract of lead on the Multi Commodity Exchange (MCX) is charting a sideways trend since past five months i.e., it has largely been oscillating between ₹180 and ₹196. Ideally, until the contract gets out of this range, we cannot confirm the next leg of trend. However, there are some bearish indications one should take note of.

The candlesticks on the weekly chart is showing good selling interest between ₹190 to ₹196. The relative strength index (RSI) and the moving average convergence divergence (MACD) on the weekly chart are indicating weakness as they are on the verge of dropping into bearish territory. Also, it has largely underperformed all other base metals since the beginning of 2022. Therefore, traders can take bearish inclination with respect to lead futures.

Yet, until the support at ₹180 is breached, bears will not be able to establish their dominance. So, traders can stay on the side-lines for now and initiate fresh sell positions when the futures decisively break below ₹180. In this case, stop-loss can be placed at ₹185. On the downside, the nearest support is at ₹166. The 38.2 per cent Fibonacci retracement coincides at ₹166, making it a considerable support, which increases the possibility of a bounce off this level. Hence, liquidate the shorts when the contract falls to ₹166.