After witnessing a price correction in December last year, the January futures contract of lead on the Multi Commodity Exchange (MCX) bounced off the support at ₹155 twice in the past three weeks. Last week, the contract gathered enough strength to break out of the prior high of ₹164.
The breakout occurred with substantial volume and the futures eased past both 21- and 50-day moving averages, indicating strong bullish momentum. However, what followed was a consolidation period wherein the contract was held within the price level of ₹164 and ₹167. Notably, during this phase the volume gradually declined.
Yet, the contract has managed to stay above the key level of ₹164 and indicators like the relative strength index and the moving average convergence divergence remain in their respective bullish territory. The trend will be inclined to upward as long as the contract trades above ₹164.
Traders can now stay on the side-line and initiate fresh long positions with stop-loss at ₹163 if the contract breaks out of ₹167. Targets can be ₹170 and ₹173.