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The Zinc futures contract on the Multi Commodity Exchange (MCX) has been volatile in the past week. The contract tumbled over 3 per cent to recorded a low of ₹186.45 on Friday. However, the contract made a sharp recovery by surging 2.6 per cent on Monday. After failing to sustain higher, the contract fell back slightly on Tuesday and was trading at around ₹192.5. The strong bounce on Monday is technically significant as it implies that the key support at around ₹185 is holding well at the moment.
Immediate resistance is at ₹195. Inability to break above ₹195 may drag the contract lower to ₹186-₹185 once again. While the contract manages to sustain above ₹185 a range bound move between ₹185 and ₹195 can be seen for some time.
A breakout on either side of ₹185 or ₹195 will then decide the next trend. A strong break above ₹195 will turn the outlook bullish for a rise to ₹200 or ₹203. On the other hand, if the MCX-Zinc futures contract declines decisively below ₹185, it can come under renewed pressure. Such a break can drag the contract lower to ₹179 thereafter.
Short-term traders with a high-risk appetite can go long on dips near ₹188. Stop-loss can be placed at ₹183 for the target of ₹198. Revise the stop-loss higher to ₹190 as soon as the contract moves up to ₹193.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading
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