Since its March 2020 low of ₹131.9, the MCX-Zinc continuous futures contract has been on an intermediate-term uptrend. In October 2020, the contract took support from the long-term base at around ₹180 and continued to trend upwards. The commodity has been on a medium-term uptrend since then.
However, the short-term trend is sideways. The contract encountered a key resistance at ₹225 in late November and has been consolidating sideways since then. Witnessing buying interest, it is on a rally now, gaining 0.77 per cent on Wednesday to ₹217 per kg.
Last week, the contract gained 3.3 per cent, and this week, it has climbed 1.8 per cent so far. The daily price rate of change indicator hovers in the positive terrain and the weekly indicator is on the brink of entering the positive terrain. Further, the daily relative strength index (RSI) is climbing higher in the neutral region towards the bullish zone.
The contract now faces a key hurdle ahead at ₹220. A breach of this level can push the contract higher to ₹225 and then to ₹230. Traders can go long above ₹220 with a fixed stop-loss. Key supports below ₹210 are placed at ₹205 and ₹200.