The Lead futures contract on the Multi Commodity Exchange (MCX) brokeabove the key 21-day moving average resistance at ₹161.3/kg in the past week. The contract has surged about 3 per cent over the last one week and is currently trading at ₹163/kg.
The short-term outlook is bullish. Significant support is seen in the ₹161.5-160 region and this will limit the downside in the near-term. Dips from this support zone might find fresh buying interest in the contract. Immediate resistance is at ₹165. A strong break above it can take the contract higher to ₹167 and ₹170 in the coming days.
Traders with a short-term perspective can go long on dips to ₹162. Stop-loss can be placed at ₹158 for a target of ₹170. Revise the stop-loss higher to ₹165 as soon as the contract moves up to ₹167.
Key resistance is between ₹170 and ₹171. A strong break and a decisive close above ₹171 will be very bullish from a medium-term perspective. Such a break will pave the way for the next targets of ₹180, ₹185 or even higher over the medium-term.
The contract will come under pressure only if it declines below ₹160 decisively. Such a break will increase the likelihood of the contract revisiting ₹157 and ₹155 levels. However, the price action on the chart suggests that the possibility is less for the contract to decline breaking below the support at ₹160.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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