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The zinc futures contract traded on the Multi Commodity Exchange (MCX) reversed lower from its intra-week high of ₹192.35 per kg in the past week. But this pullback was short-lived.
The contract has reversed higher again from the low of ₹185.6 recorded on Friday. It is currently trading at around ₹191.
The price action over the last two weeks suggests the contract is getting strong support and fresh buying interest at around ₹185. This leaves the broader bullish outlook intact. Immediate resistance is in the band between ₹192 and ₹193, which is likely to be tested in the coming sessions. Inability to break above ₹193 may trigger a pullback to ₹190 and ₹185 once again.
In such a scenario, the contract may remain in a sideways range between ₹185 and ₹193 for some time. On the other hand, if the contract manages to breach ₹193 decisively, it can gain momentum.
Such a break would pave the way for a fresh rally to ₹197-198, initially. A further break above ₹198 may see the rally extending to ₹200 and ₹204 thereafter. Strong support for the contract is in the ₹185-183 zone.
The outlook will turn negative only if it breaks below ₹183 decisively. The next targets will be ₹180 and ₹178. But such a break and fall below ₹183 look less probable at the moment.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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