Lead futures (March contract) on the Multi Commodity Exchange (MCX) saw a drop in price in the past few sessions. It fell off the resistance at ₹182, where the 20-day moving average coincides.
On Wednesday, it closed at ₹178.75. Although ₹178 is a support, lead futures could decline to the ₹174-175 price band before establishing a rally.
Once lead futures begin to rally on the back of this support, it can rise to ₹185 in the short term. Resistance above ₹185 is at ₹190.
On the other hand, if lead futures break below the support at ₹174, the outlook will turn bearish and the contract could fall to ₹160.
Trade strategy
Buy March lead futures when the price dips to ₹175. Place initial stop-loss at ₹172. When the contract touches ₹182 after the longs are initiated, tighten the stop-loss to ₹180. Book profits at ₹185.