Lead futures topped out in May at around the barrier at ₹196. The contract has been consistently making lower lows as the bears dominated in the recent months.

While there are no indications yet of a bullish reversal, note that lead futures is approaching a crucial support band of ₹173-176. So, there is only a limited space to the south from the current level.  

The December futures of lead closed at ₹179.45 on Tuesday. From the current level, it might drop to the price region of ₹173-176 but is likely to establish a fresh leg of uptrend.

The chart shows that the December contract has the potential to rally to ₹185, the nearest notable resistance, before it expires. Resistance levels above ₹185 are at ₹190 and ₹196.

In case lead futures breach the support at ₹173, it can result in a decline to ₹165 and then possibly to ₹160.

Trade strategy

Buy lead futures (December) at ₹179 and accumulate if the price dips to ₹176. Place a stop-loss at ₹173.  When the contract rises to ₹185, revise the stop-loss to ₹176. On a rally to ₹188, tighten the stop-loss to ₹185. Book profits at ₹190.

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