The lead futures contract on the Multi Commodity Exchange (MCX) which is on an upswing since June last year rallied on the back of the support at ₹130. However, it has been facing considerable downward pressure in the past one month.
After marking a high of ₹173.5 in the final week of February, the April futures contract tumbled and is now trading around ₹160. Even though the contract attempted to rally last week, it faced resistance between ₹162 and ₹163. Unless these levels are invalidated, the contract can be expected to trade with a bearish bias.
Consequent to the recent decline, the futures price is now below both 21- and 50-day moving averages and the average directional index is indicating that the bears are having an edge over the bulls. The relative strength index and the moving average convergence divergence indicators on the daily chart continue to hover in the negative territory.
Moreover, the price of lead in the international market is on a downhill as indicated by the three-month rolling forward contract on the London Metal Exchange (LME). That is, the price fell below the important level of $2,000 and continues to stay below it.
While the above factors indicate a clear bearish bias, note that MCX lead has a support at ₹157. So, traders can sell the contract with a tight stop-loss if it breaks below ₹157. Support below this level is at ₹150.