The price of lead futures has been range-bound since the beginning of this year. It entered a sideways trend after seeing a considerable fall in price.
The active expiry i.e., the January series has largely been oscillating within ₹176 and ₹178.50.
The long-term chart of lead futures show that there is a solid support between ₹173.50 and ₹176. This has been valid since June 2021. Also, the broader timeframe shows that lead futures has stayed within ₹173.50 and ₹196 since June 2021.
As the contract is now trading near the bottom of the range, the chances for a rally is high. Over the medium-term, lead futures can rise towards the range top of ₹196. Within the broad range, it can face resistance at around ₹184.
Considering the potential up move from the current level, there is an opportunity for positional longs at the current levels.
Trading strategy
On January 1, we suggested buying lead futures at ₹176 with a stop-loss at ₹172. Hold on this trade. As the contract is nearing expiry, traders can roll over the longs from January to February futures at current price levels.
Fresh traders can also be considered now, with a stop-loss at ₹172.
When the contract reaches ₹184 revise the stop-loss to ₹180. Book profits at ₹194.