The recent breakdown from the rising wedge pattern took the prices of Lead towards a low of
Rs 99.10 levels as on 09th Aug, 2011.
Since then the price witnessed a pullback from oversold levels over the past few sessions of trade.
Now, some of the important technical factors to be pointed out are that the recent pullback was on the back of extremely low volume suggesting that there was no real buying interest.
Secondly, yesterday’s close has led to the formation of a Bearish reversal pattern as outlined in the charts above.
Finally the recent rally towards the Rs 109.80 levels was met by a negative divergence on the RSI indicator.
Thus, considering the bearish technical factors mentioned above we believe that the prices of lead will decline towards Rs 104.50 / Rs 102.50 levels over the upcoming few sessions of trade.
We recommend traders to sell between Rs 106--Rs 107 levels with a stop loss placed above Rs 108.25 levels for downside targets mentioned above.
MCX LEAD AUG CONTRACT OPEN Rs 108.70 HIGH Rs 109.20 LOW Rs 106.10 CLOSE Rs 106.60
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