On Multi Commodity Exchange (MCX), the Lead futures (March contract) has been tracing a sideways trend for a little over a month The contract has largely been oscillating within the range of ₹178 and ₹182.
The contract fell over the past few sessions after facing resistance at the upper band of the above-mentioned rage—₹182.
Since the sideways consolidation stays true, we can expect the contract to see a recovery, potentially to retest ₹182. If this level is breached, the near-term outlook can turn bullish, possibly leading to a rally to ₹185 and then to ₹188.
On the other hand, if the contract slips below ₹178, it will most likely establish another leg of downtrend that can drag the contract to ₹166, a support. Subsequent support is at ₹158.
Trade strategy
Go long now at ₹178 with a tight stop-loss at ₹176.50. When the contract surpasses ₹180, tighten the stop-loss to ₹178. Liquidate the longs at ₹182.
If the lead futures decline below ₹178, it can turn the outlook negative. So, if such a move occurs, exit the above suggested longs and go short. Target and stop-loss can be at ₹168 and ₹182, respectively.