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Extending the uptrend, the November futures contract of zinc on Multi Commodity Exchage (MCX) advanced through the current week and is trading around ₹205.
Following the breakout of the important level of ₹200 a couple of weeks ago, the outlook has turned positive. The 21-day moving average (DMA) has crossed over the 50-DMA, indicating the possibility of the contract establishing a medium-term uptrend.
Corroborating the bullish bias, the daily relative strength index has been rising along with the price and the moving average convergence divergence indicator on the daily chart retains the upward trajectory.
Hence, the contract is likely to advance to ₹210 in the upcoming trading sessions. A breakout of this level can lift the price to ₹220. But in case the contract falls from current level, the support band of ₹198 and ₹200 can potentially arrest the decline. But a breach of this level can drag the contract to ₹194 - its 50-DMA.
Since the major trend in bullish, traders can take positive view and initiate fresh long position in declines with stop-loss at ₹198.
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