Lead futures (March contract) on the Multi Commodity Exchange (MCX), last week, found support at ₹177.50 and moved up. On Tuesday, it closed at ₹181.60.
The contract is now facing a resistance between ₹182 and ₹182.50. The 50-day moving average and a trendline resistance coincide at these price levels, making it a strong hurdle.
If lead futures can extend the rally beyond ₹182.50, it can appreciate to ₹185, its nearest resistance. The subsequent barrier is at ₹188.
On the other hand, if the contract falls off the ₹182-182.50 resistance, it can find support at ₹180 – its 20-day moving average. Below this, ₹177.50 is a good base.
Trade strategy
We suggest staying away at this juncture. Buy March lead futures if it breaks out of ₹182.50. Place initial stop-loss at ₹180.
When the contract touches ₹185, tighten the stop-loss to ₹183. Book profits at ₹188.