The price of zinc has marginally moved up since last week but could not form a new high as bulls seem to be losing steam. The November futures contract of the metal on the Multi Commodity Exchange, trading at ₹190 a kg after bouncing from the 50-day moving average support, is facing a resistance area between ₹191 and ₹192.7 — the 50 per cent Fibonacci retracement level of the previous downtrend.

While the moving average convergence divergence indicator is showing lack of strength through bearish divergence, the crossover of the 21-DMA above the 50-DMA indicates a potential bullish trend reversal. But for a sustainable rally in the contract, the price must decisively close above ₹192.7.

If the bullish momentum regains traction and the futures rise above ₹192.7, the contract has the potential to appreciate towards ₹200 over the medium term. On the other hand, if the prevailing sluggishness attracts more bears, the contract could depreciate towards the immediate support at ₹186.7. The support below that level is at ₹183.7.

The three-month rolling forward contract of zinc on the LME, trading at $2,475 a metric tonne, could not continue its uptrend after breaking the resistance of $2,500 last week. The contract rose to $2,560 and started to moderate, and it even slipped below $2,500. The price seems to be consolidating between $2,475 and $2,560, which also happens to be the 50 per cent Fibonacci retracement level. The next leg of the trend can be confirmed along the direction of the break on either side of the range. Beyond $2,560, resistance is at $2,650, whereas below $2,475, support is at $2,400.

Since zinc seems to be losing momentum on the upside, as indicated by the price action on the MCX and the LME, traders are advised to exercise caution. It is recommended to stay on the sidelines and initiate fresh long positions after the price decisively breaks above ₹192.7.

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

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