MCX Lead faces a key hurdle

The Hindu Business Line - - COMMODITIES - YOGANAND D

Last week, the Lead fu­tures con­tract on the Multi Com­mod­ity Ex­change (MCX) gained 2.6 per cent breach­ing a key re­sis­tance at ₹160 per kg.

How­ever, the con­tract en­coun­tered an­other re­sis­tance at ₹165 and wit­nessed a cor­rec­tive de­cline. The con­tract found sup­port at ₹160 on Wed­nes­day and be­gan to rally. It is cur­rently trad­ing at ₹162.5/kg.

It has breached its 21- and 50-day mov­ing av­er­ages and hov­ers well above them. Cor­rec­tive de­cline can find sup­port at around ₹160 once again in the near-term. An emphatic break­through of the im­me­di­ate re­sis­tance at ₹165 can push the con­tract higher to ₹170.

Fur­ther breach of the sig­nif­i­cant re­sis­tance level of ₹170 is re­quired to strengthen the up­trend and take the con­tract higher to ₹175 in the medi­umterm.

Traders with a short-term per­spec­tive can con­sider ini­ti­at­ing fresh long po­si­tions only if the con­tract moves be­yond ₹165 lev­els with a fixed sto­ploss at ₹162.

But if the con­tract fails to breach above ₹165 and falls be- low the im­me­di­ate sup­port level of ₹160, it can bring back sell­ing pres­sure. In that case, the con­tract can de­cline to ₹157 and ₹155 lev­els in the short-term.

It can con­tinue to move side­ways in a broad range be­tween ₹155 and ₹165 for some time.

A con­clu­sive break out of this side­ways range will de­cide its medium-term.

Key sup­ports be­low ₹155 are pegged at ₹152 and ₹150 lev­els.

Note: The rec­om­men­da­tions are based on tech­ni­cal anal­y­sis and there is a risk of loss in trad­ing.

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