The November futures contract of zinc on Multi Commodity Exchange (MCX), which had been oscillating between ₹188 and ₹198 since August, breached the support of ₹188 and marked a low of ₹180.8 in the first week of October. However, the contract swiftly reversed the trend and has been rallying since then.
Last week, it broke out of ₹200-mark, opening the door for further strengthening. The price stays well above the 21-day moving average.
Supporting the bullish outlook, the moving average convergence divergence is showing signs of positive momentum. Also, the daily relative strength index has been steadily rising since past two weeks.
Because of the above reasons, the contract will most likely extend the rally and advance to ₹210 in the short-term. A breakout of this level can potentially lift the contract to ₹220. Support below ₹198 can be spotted at ₹192. Subsequent support is at ₹188.
Since the overall trend is upward and there are indications supportive of the same, traders can buy the contract on declines with stop-loss at ₹192.