Lead futures (May contract) on the Multi Commodity Exchange (MCX) rallied sharply over the past month. It rebounded from the support at ₹180. On Tuesday, the contract closed at ₹191.55 per kg.
Although it has seen a fresh breakout and the recent trend has been up, lead futures has a strong barrier at ₹195. The resistance has been holding true since 2021, making it a significant one. The chart of the continuous contract of lead futures shows that it has been oscillating between ₹173 and ₹195 since 2021.
- Also read: Natural gas: Go long on futures
Given the above factors, it is safe to assume that the rally in lead futures could be nearing its end, for the short-term. A fresh leg of downswing can begin if the May futures slip below ₹190, where the 20-day moving average lies.
Trade strategy
Since ₹190 can offer a support, we suggest traders to initiate short positions after this level is breached. Target and stop-loss can be placed at ₹180 and ₹195, respectively.