Lead futures on the Multi Commodity Exchange (MCX) has been on a fall for nearly two weeks. It faced resistance at ₹190 and started to decline.
Last week, the September contract closed at ₹181.05. The contract has a support at ₹180. If this level is breached, the price might drop further.
The nearest support below ₹180 is at ₹173. Subsequent support is at ₹170. So, a breach of ₹180 can drag lead futures to ₹173 in the short-term.
On the other hand, if the contract rebounds on the back of ₹180, it can retest ₹190. A breakout of ₹190 is less likely. Before ₹190, there is a hurdle at ₹185 where both 20- and 50-day moving averages coincide.
Trade strategy
Stay out for now. Short lead futures with a stop-loss at ₹183 when the price slips below ₹180. Book profits at ₹173.