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The zinc futures contract on the Multi Commodity Exchange fell in the past week.
The contract tumbled 12 per cent from the November 28 high of ₹204.2 per kg to mark a low of ₹180 per kg on Friday.
However, the contact has managed to bounce back from the Monday low and is trading at around ₹185.5.
Technically, the bounce this week has happened from a key short-term trend-line support level of ₹179.
Immediate resistance is at ₹189. If the contract manages to breach this hurdle, the downside pressure may ease.
Such a break can pave the way for a fresh rise in the coming days. In such a scenario, the MCX-Zinc futures contract can move up to ₹195 and ₹200 levels once again. Short-term traders with a high-risk appetite can go long on a break above ₹189. Stop-loss can be placed at ₹183 for the target of ₹200. Revise the stop-loss higher to ₹192 as soon as the contract moves up to ₹197.
On the other hand, if the contract fails to breach ₹189 and reverses lower, it can dip to ₹182.5.
A strong break and a decisive daily close below ₹182.5 may increase the likelihood of the contract breaking below ₹180 thereafter. A strong break below the ₹180 level will enhance the downside pressure and drag the contract lower to ₹175.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading
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