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Bouncing off the support at ₹213, the December futures contract of zinc on the Multi Commodity Exchange (MCX) has been rallying since past few trading sessions.
However, the contract is still below the key barrier at ₹224 and for the bulls to establish a sustainable rally, this level should be decisively taken out. Until then, traders should be cautious.
In the daily chart, the price action of the contract shows that the price has largely been oscillating between ₹213 and 224 for the past three weeks. That said, unless the contract breaches either of these levels, the next swing in price can remain uncertain.
The key level to watch out for is the support at ₹213. While the trend can remain positive until the contract manages to stay above that level, the short-term outlook can turn negative if the contract breaches this support. A breakout of ₹224 can lift the contract to ₹236 but if breaks below ₹213, it can soften to ₹208. Subsequent support is at ₹205.
Traders can remain on the sidelines until either ₹213 or ₹224 is taken out.
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