Comments
The price of lead had been consolidating for quite a long time. Consequently, the continuous contract of lead on the MCX (Multi Commodity Exchange) was oscillating between ₹180 and ₹195 from September 2021 to June this year.
Nevertheless, towards the end of June, it broke below the support at ₹180. Last week, it closed at ₹175 and, technically, this can be taken as a confirmation for a bearish reversal, at least as a short-term view.
From the current level of ₹175, the nearest support can be found at ₹166. Subsequent support is at ₹158. At ₹158 lies the 50 per cent Fibonacci retracement level of the rally between the March 2020 low of ₹118.85 and the high of ₹198 in early March 2022. This makes ₹158 a significant support, and a decline below this is less likely.
But there is a possibility for the contract to retest the support-turned-resistance level of ₹180 before falling below ₹170.
Therefore, traders can consider initiating fresh short positions at the current level of ₹175 and short more when the contract sees a rally to ₹180. Place stop-loss at ₹184.
When the contract drops to ₹166, exit three-fourth of the shorts and tighten the stop-loss to ₹172. Exit the remaining short when price touches ₹158.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.