Commodities

Short-term view is bullish for MCX Zinc

Yoganand D BL Research Bureau | Updated on January 08, 2018 Published on January 02, 2018


Since taking support at ₹198/kg in early December 2017, the zinc futures contract on the Multi Commodity Exchange (MCX) has been in a short-term uptrend.

While trending higher, the contract has conclusively breached its 21- as well as 50-day moving averages and a key resistance at ₹205 during late December. The daily and weekly relative strength indices feature in the bullish zone backing the short-term uptrend.

Moreover, the long- as well as intermediate-term trends are also up for the contract. On Tuesday, the January contract climbed 0.7 per cent to trade at ₹213.4/kg. However, any corrective decline, if occurs, can find support either at ₹210 or at ₹207 in the near- term.

Subsequent resumption of the uptrend can encounter resistance at ₹217 in the coming trading sessions. Traders with a short-term perspective can make use of the corrective dips to buy the contract while maintaining a fixed stop-loss at ₹209. Initial target is ₹217.

Strong break above this resistance can push the contract higher to ₹220 in the short-term.

On the other hand, if the contract decisively plummets below the key short-term support level of ₹205, the short-term uptrend will be under threat.

In that case, trades should avoid taking fresh long positions. Subsequent supports below ₹205 are placed at ₹202 and ₹198. Next vital supports for the contract are at ₹195 and ₹191.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading.

Published on January 02, 2018
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