Lead

Commodity Call:

Lead, the power metal rose by more than 14%. Prices made a low of Rs. 107.80 on 20th June 2011 and rose quickly to Rs.123.40 in 23 trading days on 13th July 2011. The price took small profit taking move and fell back to Rs.118.30. Prices didn’t sustain the fall and rose to Rs.123.20. It failed to cross the previous high of Rs.123.40. Market fell sharply as after losing its strength to Rs.117.85. Prices broke its previous low and consolidated in the range of Rs.121-118. Finally prices fell below the mark of Rs.117 confirming the breakdown of neckline or confirmation line forming the Double-Top formation.

In the double top formation, the volume at tops was seen above average. At the time of breakdown, the volume rose above average strengthening the breakdown. The prices are even trading below the short term to long term exponential moving averages of 21 days, 55 days and 200 day. The death cross of 21 days EMA and 50days EMA was visible at Rs.119.50.

We suggest clients to Sell Lead August at 118-119 for the target of Rs.113 / 110 with the stop loss of Rs.121.50 (Closing basis)