Lead futures (November contract) on the Multi Commodity Exchange (MCX) has been declining since early September. By then, it faced resistance at ₹192 against which it fell. On Tuesday, it closed at ₹185.30.
The daily chart shows that the contract has found support ₹185. It has bounced off this level twice in October. First, in the first week and second, in the middle of the month. This shows that ₹185 is a strong support. Also, lead futures has largely been moving within ₹185 and ₹187 for the past two weeks.
At this juncture, since the contract is hovering near the support at ₹185, the likelihood of a bounce appears high. Lead futures could retest the resistance at ₹187 in the coming days.
But if the contract slips below ₹185, it can fall towards the support band of ₹180-181.
Trading strategy
Buy lead futures now at around ₹185. We suggest to keep target and stop-loss at ₹187 and ₹184, respectively.