Lead futures (December contract) on the Multi Commodity Exchange (MCX) rallied in the first three weeks of this month. However, after facing resistance between ₹193 and ₹194, the contract fell.
It closed at ₹186.85 on Tuesday, thereby giving away all the gains it made this month.
While there are no signs of bullish reversal, lead futures has a support band between ₹185 and ₹186. We expect this support to stay true, leading to a potential rebound. In such a case, lead futures can see a leg of rally, possibly to ₹193.
On the other hand, if the contract slips below ₹185, it is likely to extend the downswing to ₹180, a strong base.
Overall, we expect December lead futures to bounce off in the ₹185-186 price band.
Trade strategy
Buy lead futures (December contract) when the price dips to ₹185.50. Place stop-loss at ₹183. When the contract rallies to ₹190, tighten the stop-loss to ₹188. Book profits at ₹193.