Lead futures (January contract) on the Multi Commodity Exchange (MCX), which has been charting a sideways trend for nearly a month, slipped below the support at ₹181 on Wednesday. This has opened the room for further downside in the coming sessions.
The contract closed at ₹180.4 on Wednesday. It is likely to drop to ₹175, its nearest support. The immediate support below ₹175 is at ₹172. Note that ₹178 is a minor support.
But if lead futures recover from the current level, it is likely to face resistance at ₹181 and ₹183. Only a decisive breakout of ₹183 can turn the trend bullish. Until then, the bears will have an upper hand.
Trade strategy
Short lead futures at the current level of ₹180 and add shorts if the price rallies to ₹182. Place stop-loss at ₹184. When the contract falls below ₹178, tighten the stop-loss to ₹180. Book profits at ₹176.
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.