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BL Research Bureau
The lead futures on the Multi Commodity Exchange (MCX) has been gradually gaining since the beginning of this year. While there were intermittent corrections, the continuous contract of lead maintained the over bullish bias. In line with this, the latest leg of the rally began in the first week of October from about ₹176. The rally was sharp, and by mid-October it hit a fresh high of ₹194.65.
But the contract was not able to extend the up-move beyond that level and made a U-turn. It has been falling for the past two weeks and is now trading around ₹187. But the major trend is bullish supported by RSI and MACD, which lies in positive territory. However, there is a good chance for some more correction in price in the coming sessions.
From the current level, the nearest support is at ₹184, where the 21-day moving average (DMA) coincides. Subsequent support is at ₹180, where 50-DMA coincide. So, traders can go long in lead futures if the price softens to ₹184 and accumulate when it drops further to ₹180 and keep stop-loss at ₹175. The contract is not likely to move below this level but can resume the uptrend. On the upside, the contract can potentially touch ₹194, which can be the target for the longs. When the contract surpasses the price level of ₹190, shift the stop-loss upwards to ₹184.
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