The lead futures contract on the Multi Commodity Exchange (MCX) has been stuck in a broad sideways range. The contract has been oscillating between ₹179 and ₹196 per kg since September.

The contract made a high of ₹196 last week and has come-off from there. It is currently trading at ₹192. The sideways range remains intact. This prolonged consolidation is likely to remain in place for the next two weeks at least as trading could remain muted as the market enters the year-end holiday season.

As such, the chances are high for the contract to come down toward ₹185-180 in the near-term. However, the broader trend is up. The contract has been in a strong uptrend since March last year. This overall uptrend is likely to remain intact.

As such, the chances are high for the contract to break the sideways range on the upside eventually as we enter into the new year. A break above ₹196 can take the contract up to ₹202 initially. A further break above ₹202 will then pave way for a rise to ₹210-212.

Traders can wait for dips and go long at ₹188. Accumulate longs at ₹182. Keep the stop-loss at ₹173. Trail the stop-loss up to ₹192 as soon as the contract moves up to ₹199. Move the stop-loss further up to ₹201 as soon the contract moves up to ₹206. Book profits at ₹210.

Published on December 28, 2021