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The Zinc futures contract on the Multi Commodity Exchange (MCX) has been in a downtrend since encountering resistance in the band between ₹230 and ₹234 in April 2019. The contract has fallen 0.8 per cent on Thursday and trades at ₹209.8 a kg. It has slumped 2.5 per cent in this week.
The contract was on an intermediate-term uptrend since taking support at ₹167 in December 2018.
The short-term outlook is bearish for the contract. It can continue to trend downwards and test support at ₹200. An emphatic break below this base level can drag the contract down to ₹195 and ₹190 levels in the short-term. Next significant support is at ₹180. Traders can sell the contract with a stop-loss at ₹219.
On the other hand, a conclusive break above ₹220 is needed to strengthen the uptrend and take the contract higher to ₹225 and ₹230 levels. That said, to further reinforce the uptrend, the contract needs to break above ₹234 decisively to extend the rally to ₹240 and ₹245 levels.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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