SHFE Lead Breaks Above Previous High and Holds Above Upper Bollinger Band; Short-Term Strength but Beware Pullback from Highs [SHFE Lead Brief Review]

SMM, August 31:

The SHFE lead 2610 contract opened at 16,230 yuan/mt in intraday trading, quickly shot up to 16,345 yuan/mt after the open, then consolidated at highs in the 16,330-16,360 yuan/mt range, with its center edging higher again in late trading; it hit an intraday high of 16,380 yuan/mt and finally closed at 16,370 yuan/mt, up 125 yuan/mt, or 0.77%, from the previous trading day's closing price; full-day trading volume was 58,377 lots, and open interest was 70,318 lots. The daily candlestick closed with a solid bullish body, breaking above the previous high and holding above the upper Bollinger Band. SHFE lead is expected to continue to hold up well in the short term, as regional supply tightness and suppliers holding prices firm on shipments are supporting lead prices; however, persistently rising spot lead prices are dampening downstream purchase interest, so caution is needed over pullback pressure from weak high-level transactions.

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