Commodities

MCX-Zinc: Sell-off can intensify below ₹186

Akhil Nallamuthu BL Research Bureau | Updated on October 01, 2020 Published on October 01, 2020

Price action since the beginning of September shows that the October futures of zinc in the Multi Commodity Exchange has been trading with a bearish bias. The contract has formed a lower highs and the 21-day moving average (DMA) is about to slip below the 50-DMA — an indication of a potential change in the medium-term trend.

Corroborating the downward bias, the daily relative strength index is below the midpoint level of 50 and the moving average convergence-divergence indicator in the daily chart has been charting a downward trajectory and is on the verge of entering the bearish zone.

 

Also, we can also observe a descending triangle pattern in the daily chart with its base at ₹186. Notably, the 38.2 per cent retracement level coincides at this price point, making it a strong support. So, even though the contract is trading with a bearish bias, the price should fall below ₹186 to establish a sustainable downtrend. Hence, traders can wait for now and sell the contract with a stop-loss at ₹192 if price breaches ₹186.

Note: The recommendations are based on technical analysis.

There is a risk of loss in trading

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Published on October 01, 2020
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