Command future on Multi-Commodity Exchange (MCX) has been charting a sideways trend since April of this year, with the contract continuously fluctuating in a range of ₹182 and ₹185. On Wednesday, it refused to close below the ₹182 support, opening the door for a further drop.
Although ₹180 is a potential support, we expect the contract to drop below this level and touch ₹175, a support level in the near term. The next support is at $173.
On the other hand, if the contract starts to recover, it can rally towards the ₹184-185 price range. The 50-day moving average is located at ₹184.
However, as it stands, the probability of a drop is high and therefore, traders may consider taking new short positions.
commercial strategy
Short sell MCX lead futures at current level of ₹181. Add more shorts if the price rises to ₹182.50. Set initial stop loss at ₹183.50.
When the contract hits ₹178, tighten the stop loss to ₹180. Set profit at ₹176.
