Zinc prices, after staying volatile during the first two months of this year, witnessed a steady increase in price until recently. However, over the past one week, the prices have come under pressure. Thus, the continuous contract of the metal on the Multi Commodity Exchange (MCX), after marking a high of ₹320.55 a week ago, have now slipped to current level of about ₹282, thereby losing nearly 12 per cent in one week.

Nevertheless, the overall uptrend has not come under threat i.e., the short-term trend will remain bullish bias until the contract remains above 21- and 50-day moving average, which currently lies at ₹275 and ₹256, respectively. Also, the 61.8 per cent Fibonacci retracement level of the prior rally coincide at ₹275, making it a key support. The medium-term trend will remain positive as long as the contract is above ₹230.

So, going forward, the contract may see price moderation to the price band of ₹270 and ₹275 before resuming the uptrend. Note that the possibility of the contract staying sideways around these price levels for some time cannot be rejected.

Given the prevailing scenario, traders can go long between ₹270 and ₹275. Place stop-loss at ₹258, a potential support level. A rally thereafter can lift the contract to ₹300, where one can exit partially. Post that, shift the stop-loss upwards to ₹270 and look for a potential target of ₹320.

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