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Lead

MCX Lead futures initially traded sideways during the September month so far owing to falling demand inthe Asian countries due to rise in covid-19 cases including Japan. However, prices witnessed asome pull back in the second half of July and during the August month so far owing positive industrial data reported in U.S. and European Union. US Federal Reserve and other central banks so far in the last month kept interest rates unchanged. By 16th September, MCX Lead prices closed at Rs.187.25/kg, higher by 5.18% compared to closing of Rs.178.19/kg reported on 31st August. Looking forward for the coming month, we expect MCX Lead futures to trade bullish from the lower levels again with improved industrial usage with reports of fall in LME inventories. Rise in cancelled warrants have also indicated greater buying in the global market to support prices. Although worries continue to loom regarding rising dollar index with cases rising once again in Asian countries that has led to semi lockdown situation. However, the US and European markets are showing recovery with faster vaccination process. But then recent economic datas of US is indicating recoveries could take few more months for further progress. As per International Lead and Zinc study Group (ILZSG), global refined lead production for the month of June’21 has reported at 1034.8 thousand metric tonnes(MT), higher by 1.63% compared to previous month's production of 1018.2 thousand metric tonnes. On the other hand, metal usage during June’21 has been reported at 1041 thousand tonnes, higher by 6.90% compared to previous month's usage of 994.8 thousand tonnes. Although the data of is the earlier months, but then, mining activities in South America is expected to decline due to local issues prevailing in Peru and Mexico countries that could create supply tightness in the global markets. Hence, we expect bullish trend in MCX Lead futures for the month ahead.

On aweekly chart, MCX Lead (Oct) future has been rising continuously in a bullish channel with Higher Highs and Higher Lows formation from the last couple of weeks. The price has also been trading above the 21 Exponential Moving Averages, which suggests bullish strength. In addition, the indicator MACD also indicates the long position with positive crossover. Moreover, an oscillator Stochastic RSI suggested also positive crossover, which is again an upside confirmation. Hence, based on the above technical structure one can initiate a long position in MCX Lead (Oct) future at CMP 182.85 or a fall in the price till 181.50 levels can be used as buying opportunity for the upside target of 191. However, the bullish view will be negated if MCX Lead (Oct) future closes a below the support level of 178.90.

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