MCX Lead futures traded sideways to bearish during the September month so far owing to rising worries about the situation worldwide regarding the outbreak of the covid-19. This has fueled fears regarding the demand for Lead in the global markets along with other base metals. Worries of second wave of covid-19 especially in United States, Latin American Countries and China continue to linger which had put pressure in prices. By 24th September, MCX Lead prices closed at Rs.145.5/kg, higher by 3.65% compared to closing of Rs. 153.05/kg reported on 31st August.
Looking forward for the coming month, we expect MCX Lead futures to trade bearish due stronger Dollar index and weak economic data in the United States and European Union. China and other Asian countries usage which had been lagging behind in the previous months, is also forecasted to remain lower in the months ahead. As per International Lead and Zinc study Group (ILZSG), global refined lead production for the month of July’20 has reported at 988 thousand metric tonnes(MT), lower by 0,78% compared to previous month's production of 995.8 thousand metric tonnes. On the other hand, metal usage during July'20 has been reported at 960 thousand tonnes, lower by 1.01% compared to previous month's usage of 969.7 thousand tonnes. Mining activities in South America has been lower with rising Covid-19 cases especially in Chile, Peru, Mexico countries which is likely to disrupt production activities in the month ahead. Moreover, the trade surplus for July’20 has been reported which is likely to bring pressure in Global Lead prices during the coming month. Hence, we expect bearish trend in MCX Lead futures for the month ahead.
On the daily chart, MCX Lead (Oct) has breached below its “Ichimoku Cloud”, which indicates weakness in the counter. Also, the counter's 20*50 Days “Simple Moving Average” has given a negative crossover which indicates power in the hands of the bears. Furthermore, price has been trading below its “Parabolic SAR” which signals bearishness. Additionally, momentum indicator RSI (14) has sustained below its 50 level, which confirms bearish dominance in the counter, So, based on the above technical parameters, we can expect a bearish movement in MCX Lead (Oct) futures for the month ahead. On the higher end, the price may find the resistance around 150.40 levels, while on the lower end; it may test the support at 141.90 levels.
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